Percentage Allocation Management Module (PAMM) is a system of using pooled funds to trade forex. Three parties are involved in PAMM accounts; the forex broker, investor, and manager. A fund manager is an expert forex trader who trades forex and CFDs with funds contributed by investors with the aim of generating profits.
Investors are clients who allocate part or all their funds to a selected fund manager who trades on their behalf. Forex brokers are investment firms that provide software and hardware infrastructures that enable their clients to participate in forex trading and PAMM account management. Profits are shared according to the percentage contribution of the investors after the manager’s commission has been deducted.
In this article, we will focus on offshore brokers that offer PAMM accounts for investors from the United States.
A list of Best Offshore PAMM Brokers :
Here is the list of best offshore brokers for PAMM Accounts
- LQDFX | Best broker for beginner traders
- KOT4X | Best broker for multiple accounts
- Hankotrade | Best broker for low trading fees
- ProsperityFX | Best broker for trading crypto CFDs.
- FXChoice | Regulated offshore forex broker
Top 5 Offshore PAMM Brokers Reviewed in 2024
LQDFX
This is an online broker that offers more than 100 forex and CFDs on its MT4 trading platforms. It was founded in 2015 in St. Vincent and the Grenadines. LQDFX states that its liquidity pool comprises over 250 banks resulting in tight spreads, and fast execution with no requotes.
Traders can increase their capital with a 100% bonus and leverage up to 1:500. You can register for PAMM accounts as an investor or a fund manager. LQDFX provides a list of over 200 fund managers and their trading statistics for an investor to study before making his choice.
Pros
- Traders only need to deposit at least $20 before they can start trading.
- 100% bonus for deposits starting from $250.
- Multiple account types to fit the needs of every type of trader.
- Supports multiple payment options including Bitcoin, altcoins, PayRedeem eCards, etc.
- The educational resources provided include more than 35 training videos and a forex eBook.
- Trading tools like the Economic calendar, trading calculators, market news, chart analysis, etc are available.
Cons
- The broker is not regulated by any authority.
- No social trading platforms
KOT4X
This is an online broker that enables its clients to speculate on the price of about 250 forex and CFDs on its MT4 platforms on the web, desktop, and mobile apps. As an ECN/STP broker, its spreads are low, executions are fast and trading fees are competitive.
KOT4X provides a powerful PAMM platform where its clients can register as an investor or PAMM manager. Only 4 account types are available with KOT4X, they are as follows:
- KOT4X MT4 ECN is for traders who wish to trade by themselves and deploy their own trading strategies. They can further choose from Standard pairs, PRO pairs, VAR pairs, and MINI pairs.
- KOT4X MT4 Demo is a practice account that simulates how trading works without any risks to your invested capital.
- KOT4X_PAMM Manager is for proficient fund managers who wish to trade with funds pooled from different investors. They earn commissions from their profits.
- KOT4X_PAMM Investor is an account for investors who want experts to trade forex and CFDs on their behalf.
Pros
- Only $10 is required to start opening and closing live trade positions.
- Traders can choose from different account types according to knowledge, investing capital, or preferences.
- Expert traders can prove their expertise to get funded accounts capped at $200,000 while earning 80% of the profits generated.
- Multiple cryptos are accepted such as BTC, LTC, ETH, DOGE, XRP, USDT, etc.
- 24/7 online support team available through web chats and email.
Cons
- The broker charged inactivity fees from accounts that are unused for 6 months.
- No training resources
- No market news and analysis.
Hankotrade
Hankotrade states that it is a true ECN broker that offers low spreads, competitive trading fees, and fast execution of forex and CFD trades placed on its MT4 or MT5 trading platforms. There are no restrictions in trading styles; you can scalp, hedge, use trading robots, and other trading systems.
The broker provides custom settings for PAMM/MAM account managers to enable them to trade for investors. US investors can sign up for an investor account, verify their identities, make a deposit, choose a manager and watch their account balances grow.
Pros
- A minimum of $10 is required to open a live trading account.
- ECN Plus account comes with spreads from 0.0 pips and a commission of $2 per lot; which is very competitive.
- Traders can choose from two popular platforms; MT4 and MT5.
- Multiple account types including STP, ECN ECN Plus, and Islamic accounts.
- A 100% deposit bonus is available for clients who deposit at least $100.
Cons
- No daily market analysis or market news.
- Tradable assets are limited; no ETFs, bonds, or stocks CFDs.
ProsperityFX
ProsperityFX was founded in 2020 in St. Vincent and the Grenadines as a broker that offers over 200 forex and CFD assets for trading. Its platform of choice is the popular MT4. ProsperityFX is an ECN/STP broker that offers multiple account types, several payment options, and low spreads.
The broker states that its PAMM accounts have something for everyone. Investors and account managers are welcome to create accounts and earn together.
Pros
- The maximum leverage is 1:500.
- Multiple account types to suit the needs of a wide range of traders.
- If you are proficient in trading, you can get a funded account and keep 80% of your profits.
- With a deposit of $25, you can start trading forex and CFDs.
- The client support desk can be reached at any time; 24/7.
Cons
- Only the MT4 trading platform is available.
- No education materials to support newbies.
FXChoice
Founded in 2010 in Belize, FXChoice is an experienced and regulated broker that provides the enabling environment for its clients to trade forex and CFDs. Trading fees are low while spreads are competitive. Educational resources are provided for beginners.
FXChoice states that it offers Multi-account management (MAM) service to money managers that already have their own clients and wish to trade for them. The manager can apply by completing a form on the website. When it is approved, he can add his investors to pool their funds and start trading with it.
Pros
- Regulated by the Financial Services Commission (FSC) of Belize.
- A 50% welcome bonus is given to all new and verified accounts.
- Multiple payment options including bank transfers, credit/debit cards, cryptos, and online wallets.
- The MetaTrader platforms; MT4 and MT5 are both available for trading.
- Social trading is available in partnership with ZuluTrade and Myfxbook’s AutoTrade.
- Free VPS for clients who maintain a balance of $3,000 and trade at least 5 lots monthly.
Cons
- The maximum leverage is 1:200.
- The minimum deposit is $100; which is relatively high.
Why Offshore Brokers for PAMM Accounts?
Traders from the USA who trade with offshore brokers do so because they offer generous trading conditions when compared to US-regulated brokers. Below are some reasons why US traders consider offshore brokers for PAMM accounts:
In the US, investments are subjected to capital gains tax, so commissions or profits from PAMM accounts are taxed. But, offshore traders do not tax traders’ accounts.
US-regulated brokers charge higher trading fees and higher minimum deposits. But, offshore brokers only need a paltry sum to register for a PAMM or MAM account. Furthermore, the trading fees incurred by a PAMM investor will be much less with offshore brokers.
How to choose the best offshore brokers for PAMM accounts
Choosing the right PAMM account broker as well as the PAMM manager is important for a US investor. Below are some ways to choose offshore PAMM brokers:
Reading reviews
A good place to start your search for offshore PAMM brokers is the Internet. There are many sites that review brokers including offshore brokers. You can make a list and note important points listed about each broker. Later, you can visit the brokers’ websites to check out the available services as well as their terms and conditions.
Accessing the leaderboard
Some offshore brokers include the “Managers’ leaderboard” on their website or personal area. This is a list of PAMM managers, their profiles, trading statistics, and ratings. If you are an intending investor, you can check the existing managers and their performances. This will inform you about the number of managers, their trading capitals, the number of investors, and what payouts and trading performance look like.
Final Verdict
PAMM brokers are online forex and CFD brokers that offer special trading software which can be used by managers to trade the accounts of other traders who are registered as investors. Offshore brokers are unauthorized forex brokers that are majorly located in offshore countries but they accept clients from foreign countries including the USA.
Are you an investor looking for the best offshore PAMM account brokers? Our picks are LQDFX, KOT4X, Hankotrade, ProsperityFX, and FXChoice. Out of these 5, LQDFX has its leaderboard while FXChoice offers only MAM accounts. But, all the brokers offer forex/CFD trading on the MT4 platform, offer high leverage, low minimum deposit, competitive trading fees, etc.
To choose a PAMM broker, first check for online reviews, identify some brokers, and check their PAMM account leaderboards. You can then check the trading conditions before making your final decision.
Though trading with offshore PAMM brokers may seem convenient, always remember that trading with unregulated brokers comes with higher risks when compared with regulated brokers.
