Everyone would like to make money from cryptocurrencies, but not everyone knows enough about how to do it. If you do not want to learn the secrets of trading, and at the same time would like to use a strategy other than hodl – there is one more solution – PAMM account. What is a PAMM account, how can it help in margin trading and where in the crypto market you can create such an account – about it in the article below.
PAMM account – what is it?
PAMM, from the English Percentage Allocation Management Module, is a tool that allows you to entrust part of your own funds to a larger pool managed by another, more experienced trader. Thanks to this, we do not have to participate directly in trading, and our funds earn for us in the hands of a much more experienced investor.
This method is widely used primarily in forex, but has recently also been used more and more in cryptocurrency markets. How does PAMM work in practice?
3 parties most often participate in PAMM:
- Broker – provides the appropriate infrastructure and environment in which PAMM can function.
- Trader – he deals with the actual running of the operation and he carries out all the transactions.
- Investors – a group of investors provides the capital a trader needs to make a transaction.
Investors participate in the created “fund” most often to a varying degree. The trader charges a commission on the profit generated by the fund. The remaining surplus is distributed among investors depending on the degree of their financial involvement.
PAMM account and margin trading
PAMM is a great opportunity to secure additional financial benefits without additional time investment. In the world of cryptocurrencies, the platform that will soon introduce the possibility of creating such an account is Geco.one. In this case, we decide to create a PAMM in a cryptocurrency environment with the possibility of using financial leverage, which is another opportunity to multiply profits. As we read on the Geco.one blog:
The PAMM service connects traders and investors on favorable terms for each party
Geco.one will enable the safe use of the PAMM of each site. As an investor, we can benefit from investments in various accounts. Some PAMMs are run by traders with higher risk, and some with lower risk. Geco.one’s offer therefore enables diversification within this tool.
However, PAMM is about security. Its guarantor should be a broker. In this area, Geco.one cares for the interests of both investors and traders. Each trader who wants to get involved in a PAM account undergoes a detailed compliance analysis. So all traders admitted to trading are verified.
When it comes to traders – the Geco.one platform ensures security and automation of all processes. Moreover, it protects the intellectual property of the trader by limiting the possibility of copying his movements.
It is no wonder then that this established method is entering the cryptocurrency markets. In the next few years, it may become a key element in the functioning of decentralized assets trading.