Some questions about PAMM service

[DollarBull]

The PAMM threads seem heavily restricted for posting. Would it be possible to open similar nonrestricted threads where those not in PAMM presently may post questions?

For example, I have these questions:

-In reference to one of your posts on how to adjust open/closed positions when a new member joins a PAMM or makes new deposits or withdrawals... the adjustment of position requires fractional trades. Are fractional trades allowed to adjust positions? Suppose I have 10 lots in EURUSD. If I sell 1 Lot would it reduce to 9 Lot or will it open a Short position in EURUSD?

-The requirement for manager capital is not fair. Suppose there are investors who are willing to invest in my PAMM without any manager capital, why should fxopen bother about it?

-Is arbitrage allowed in PAMM accounts or will it be labelled as Churning/scraping? This is important because arbitrages primarily make trades with 1-2 pip profits in each trade (outside slippage). Also, I can use EA for arbitrage.

-The Trailing Stop gets active only when there is a profit in a trade. If it is on the loss side, it doesnt. A stoploss seems required separately. This is not how it is in other brokerages. Trailing Stop acts as Stoploss at ANY point. (reason I am bringing it here is, some EAs are written for other brokerages and one has to start modifying them for fxopen otherwise).

Any and all answers are welcome!

[FXSupporter]

Hi DollarBull!

Long question takes a long answer. But i am sure we can clarify everything that is not clear about PAMM.

The PAMM threads seem heavily restricted for posting. Would it be possible to open similar nonrestricted threads where those not in PAMM presently may post questions?

There are NO restriction for posting in the PAMM thread. Even if you are not a PAMM Manager or Investor, feel free to post in this thread to ask any general questions about PAMM service.

-In reference to one of your posts on how to adjust open/closed positions when a new member joins a PAMM or makes new deposits or withdrawals... the adjustment of position requires fractional trades. Are fractional trades allowed to adjust positions? Suppose I have 10 lots in EURUSD. If I sell 1 Lot would it reduce to 9 Lot or will it open a Short position in EURUSD?

Adjusting positions means opening more positions or closing some of the open positions.I am not sure i understand what you mean exactly, do you mean fractional trade =partial close? In your example: If you have an open trade buy EUR/USD 10 lots, you may make a partial close and sell 1 lot EUR/USD. The remaining 9 lots will stay open.

-The requirement for manager capital is not fair. Suppose there are investors who are willing to invest in my PAMM without any manager capital, why should fxopen bother about it?

Manager's Capital is needed to convince investors that their funds will be safe. It means, that the Manager risks some of his own money as well, so he will be even more motivated to make successfull trades.
The minimum Manager's Capital for PAMM-Standard accounts is USD 1000 and for PAMM-ECN accounts USD 5000.

-Is arbitrage allowed in PAMM accounts or will it be labelled as Churning/scraping? This is important because arbitrages primarily make trades with 1-2 pip profits in each trade (outside slippage). Also, I can use EA for arbitrage.

Trading conditions in PAMM-Standard accounts are the same as in regular Standard accounts, and PAMM-ECN is the same as regular ECN accounts.
It is okay to make 1 or 2 pips profit in ECN (including PAMM-ECN) and Standard ( including PAMM-STANDARD) accounts both, but Standard and PAMM-Standard accounts have 2 restrictions:
1) Most of your trades must be open for more than 1 minute
2) SL, TP and Pending Orders levels are 10 pips away from the current Market price.

We also allow to open opposite (buy and sell) trades on the same pair (hedging).

Churning = is something totally different. It has nothing to do with your trading style. Churning is using your referral link to open more accounts fro yourself and getting partnership commission from yoru own trades. FXOpen partnership programm does not work with PAMM Accounts, so you do not need to worry about churning.

[FXSupporter]

-The Trailing Stop gets active only when there is a profit in a trade. If it is on the loss side, it doesnt. A stoploss seems required separately. This is not how it is in other brokerages. Trailing Stop acts as Stoploss at ANY point. (reason I am bringing it here is, some EAs are written for other brokerages and one has to start modifying them for fxopen otherwise).

I do not really understand your point here. Trailing stop helps you to "lock" your profits. It continues to modify your Stop loss when the market is moving your way and you are in profit. If the market is moving against you - trailing stop does not modify your stop loss and the trade closes when the stop loss level is reached. I do not see why you want the trailing stop to modify your stop loss when you are loosing? If it were so, stop loss would be useless.

What you need to know about Trailing stop, is that it works on Metatrader 4 side, not on FXOpen server side. It means, it will only work while your MT4 is connected and you are logged into yoru account. If you log off and shut down MT4 - Trailing stop will not function.

If you think i didn;t understand yoru question about trailing stop - please, try to explain once again.

[DollarBull]

I do not really understand your point here. Trailing stop helps you to "lock" your profits. It continues to modify your Stop loss when the market is moving your way and you are in profit. If the market is moving against you - trailing stop does not modify your stop loss and the trade closes when the stop loss level is reached. I do not see why you want the trailing stop to modify your stop loss when you are loosing? If it were so, stop loss would be useless.

What you need to know about Trailing stop, is that it works on Metatrader 4 side, not on FXOpen server side. It means, it will only work while your MT4 is connected and you are logged into yoru account. If you log off and shut down MT4 - Trailing stop will not function.

If you think i didn;t understand yoru question about trailing stop - please, try to explain once again.

Here is a hypothetical situation:

I buy EURUSD at 1.4400. Stoploss at -20 pips. TrailingStop of 20 pips.
First the price moves up by 18 pips. At this point the stoploss remains at 1.4380. But if TrailingStop is active it would move the stoploss to 1.4398. So, if the price retracts and hits 1.4398 the trade is closed for a loss of just 2 pips. This is what happens in OandA.com TrailingStop. In FxOpen TS is not active until the price goes past 1.4420.

TS should keep moving the stoploss. It is not the business of TS to worry about profit. It is TRAILING STOP, not PROTECT-PROFIT-LIMIT. The problem is particularly acute when StopLoss is at -80 pips and TrailingStop is 80 pips, the price goes in a huge whipsaw. In OandA.com it escapes disaster. In MT4 it results in a 80 pip loss even after swinging towards positive side by close to 80 pips. Risk Minimization is an integral aspect of trading and cutting losses is how one manages to win in this game.

I agree, it is mostly a problem at MT4 design and nothing to do with FxOpen.

I deeply appreciate responses to the other questions. Let me analyze them and come back later if I have any doubts.

[FXSupporter]

I buy EURUSD at 1.4400. Stoploss at -20 pips. TrailingStop of 20 pips.
First the price moves up by 18 pips. At this point the stoploss remains at 1.4380. ... ..... .... In FxOpen TS is not active until the price goes past 1.4420.

Yes, that's right, this is how it works not only in FXOpen but with all other MT4 brokers, so yes, it is

it is mostly a problem at MT4 design and nothing to do with FxOpen.

[kavya545]

So the minimum amount to deposit to open a PAMM manager account is 1000$?? and 5000$ for a ECN account?

[FXOpen PAMM]

So the minimum amount to deposit to open a PAMM manager account is 1000$?? and 5000$ for a ECN account?

Yes, that's right.

[4xsignal]

As a PAMM Manager, can I have my trading statements hidden permanently from Public & investorsa,as I do not want to disclose my strategy..

Investors can still see the Equity, Drawdown , Annual profit, Dialy return etc... and can safely invest.. if they want to...

Thanks for reply..

[Vario]

Agreed. I would also cut off the statements to investors.

[janknoah]

My question is, why not the broker set rules for the PAMM managers and investors rather than managers setting the rules themselves which also tend to benefit them only?

[kalex76]

My question is, why not the broker set rules for the PAMM managers and investors rather than managers setting the rules themselves which also tend to benefit them only?

Me also feels like that - there should be a proper balance between the benefits distribution to PAMM manager , clients and the brokers.

I think for all there is some rule made by the broker site .

[janknoah]

The brokers should set the terms and conditions for the managers and investors, so that the terms will be uniformed

[ceestech]

with both uniform the losses that the investor take would be reduced and i think the amount the manger should take for brokers should also be controlled so he does not have what he can't control.

[janknoah]

When brokers set the rules guilding pamm investments, there will be better control of capital

[ceestech]

it all goes down to uniformity of the account and better assurance for the investors.