PAMM is a scam
You even managed to obfuscate in the PR topic which will be demolished very soon :)
I liked it there )) - " Finally, a little bit of the legal aspects of PAMM accounts. To quote wikipedia: "
Soon there will be new professions - wiki lawyer and wiki lawyer.
Total payback is not necessary at all.
There is enough investors on the "roller coaster" who prefer to invest on the estimated minimum balance. So even a PAMM that pays off the others is not necessary at all.
PAMM in fact - a deception, based on the fact that if you do two PAMM accounts with opposite strategies, one will rise, the other will fall - if you spin a dozen accounts at once, it is easy to achieve 900% of fictitious profits.
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Plus, every month, managers take the lion's share of profitable PAMM accounts profit of investors, and in the case of subsequent loss - the investor is not compensated.
Do you seriously believe that someone is interested in earning money for YOU, with experience, knowledge and a working strategy?
A PAMM client is earnings.
The main goal of all these "managers" is to hang the risks on the client's funds, and take their cut. The Grail
Do you seriously believe that someone is interested in making money for YOU with experience, knowledge and a working strategy?
The pamm's client is the profit.
The main goal of all these "managers" is to hang the risks on the client's funds, and take their share. The Grail
Don't think ill of people.
Are you wearing a new outfit?
Are you wearing a new outfit?
Are you in a new outfit?
Appreciate the humour, in case you hadn't noticed )) - third post from the bottom - https://forum.mql4.com/ru/47018/page720
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PAMM is essentially a scam, based on the fact that if you make two PAMM accounts with opposite strategies, then one will grow, the other will fall - if you spin a dozen accounts at once, then it is easy to achieve 900% fictitious profit.
Below is an article http://neoneuro.com/blog/2012/trading/pamm-deception/
- Clever, prudent Pinocchio, would you like to have ten times more money? Pinocchio stopped, gaped his mouth ... - You're lying! The fox sat on its tail, licked its lips: - I'll explain to you now. There is a magic field in the Land of Fools - it is called the Field of Miracles ... Dig a hole in this field, say three times: “Crex, fex, pex”, put gold in the hole, fill it with earth, sprinkle salt on top, fields well and go to sleep. In the morning, a small tree will grow out of the hole, instead of leaves, gold coins will hang on it. Understandably?The Golden Key, or the Adventures of Pinocchio Alexey Nikolayevich Tolstoy
Are Forex PAMM accounts a scam? The article provides a detailed study of the issue.
This article is a continuation of the topic Forex. http://neoneuro.com/blog/2011/trading/forex-can-earn-myths-and-reality/ In this article we will try to figure out whether investing in Forex PAMM accounts is a serious, albeit high-risk business, or another "trap for fools". Advantages of PAMM for an investor
Simplicity. There is no need to learn the intricacies of technical analysis, the most complicated scalping methods, follow the news and do anything in general, except to open a PAMM account. In fact, it is not much more complicated than a deposit in a bank and is almost identical in terms of labor costs to opening a mutual fund in the stock market.
Time. All operations are carried out by a professional manager, while a private investor can generally forget about his account for some time, while work on Forex will continue. This is a huge advantage over conventional real-time Forex trading. Diversification. Can invest money in several PAMM accounts at once, for example, those that promise high profits with high risk and those that promise smaller profits, while the risks are positioned as small. The benefits are enormous: it is obvious that a "professional manager" will understand currency trading better than a "mere mortal" - so why not open an account with PAMM?
Disadvantages of PAMM accounts. The most interesting thing is that they are almost non-existent. In this case, the absence of flaws is the main flaw !
If you are promised more than 10% per annum and you do not clearly understand what the risk is, then by agreeing, you will most likely lose all the invested funds! So, PAMM has no obvious shortcomings. Let's look at the non-obvious. First, as stated in the article. http://neoneuro.com/blog/2011/trading/forex-is-it-possible-to-earn-myths-and-reality/ - making money on Forex is almost impossible. How then are PAMM accounts obtained with a yield of hundreds of percent per annum? Let's take, for example, Alpari's PAMM rating: http://www.alpari.ru/ru/investor/pamm4/pamm_account/rating/ the first ten PAMM accounts show a return of over 200% in 6 months. We will not consider the possibility of direct deception when the data is frankly falsified - we will consider only "relatively honest" methods of promoting PAMM.
PAMM back and forth .. Making a trading system that will give 1000% profit is actually very simple. To do this, you need to open 16 accounts of one hundred dollars each, investing a total of $1,600, and carry out multidirectional risky transactions. On the first transaction, 8 accounts will merge, on the other 8 there will be a profit of about 90%. 10% losses are spreads, "slippage" and similar problems. In fact, the losses will be about 3%, 10% is taken to simplify the calculations. Next, we repeat the operation on the remaining 8 profitable accounts - again transactions in both directions, and so on. In total, for four transactions, one of the accounts will have more than $1,000. Specifically, if we take 90% profit from each transaction: 100 * 1.9 * 1.9 * 1.9 * 1.9 = $ 1303.21, this is 1203% profit! In fact, the trader lost $300 for these operations - but on OTHER PAMM accounts. A private investor may simply not know about these PAMM accounts. Let's get back to Alpari's rating: even among the active PAMM accounts, the majority are unprofitable, while the accounts that ended up with zero are not shown at all. This means that such a method of "cheating" a PAMM account is quite probable.
The main problem of "wound" PAMMs. This is written at the end of the information about PAMMs - “Incomes received by the manager in past periods cannot be a guarantee of income in the future!” Imagine that four people are playing roulette and making two consecutive bets as follows:
One of them will in any case quadruple his savings, that is, receive a 300% profit in just two transactions. What is the probability that he will win next time? Not more than 50%. In fact, the probability of winning is less than 50%, because there is zero in roulette, and in Forex, the spread plays the role of zero. Think about whether in this case it is possible to consider the player who guessed the color on the roulette wheel a successful trader? The above method, where elementary transactions are made in opposite directions, is far from the only one. There is the famous "Martingale" - when the bet doubles with each loss - all martingales are mathematically unprofitable, and if you run several of these strategies on different timeframes, it is easy to get 200 - 300% profit on one - by draining the rest. Here is a typical martingale chart: http://www.alpari.ru/ru/investor/pamm4/pamm_account/info/197465 You can make several strategies for working "in the channel" and "for breakdown". The former will give profit at low volatility, the latter at high volatility. Here the picture is the same - we launch several types of multidirectional strategies, and one of them will give a profit close to the total amount of money invested, minus the cost of spreads. Card Example: Thirty-six people invested $100 and placed a bet on which card would fall out of a deck of 36 cards. Each of them bet on one card, and in such a way that bets were placed on all 36. One of them will take all 3600 dollars, the rest will leave with nothing. Can a successful player be considered "professional" or is it just pure math? Many types of strategies to "cheat" funds on PAMM allow you to make a variety of growth charts - for almost every taste. If you don’t risk all your money with each transaction, then it’s quite possible to spin up a system that will “blow” down several times - so it’s quite difficult to notice the catch. As is known. to come up with a losing strategy in Forex is as difficult as a profitable one - if you do not take into account losses on spreads. The fact is that any strategy can be “flipped”. Thus, a losing strategy “on the contrary” is a profitable algorithm. This feature allows you to create "multidirectional" PAMM accounts in the most complex variations - using any real Forex trading strategies. Consider the best Alpari PAMM accounts for the last 6 months: #1 1275% in six months!!!
The chart clearly shows big ups and downs. This is how it should happen on accounts that use the mathematical strategy of “cheating” the account. The chart is similar to trading “in a channel”, when there is a profit with small currency movements, and a sharp loss during strong fluctuations. then to attract investors and recoup them. #2 918% in six months
Here we see just catastrophic ups and downs. In this case, a system with transactions in different directions may well be used. Moreover, if PAMM went down, then you can not take it to zero - for example, above the word "month" on the chart, the yield is -62% relative to the initial capital - this means that when returning to zero, the chart will show + 200% relative to the minimum date. By the way, if the minimum date is instantaneous, that is, if it is only one day on the chart, then the rating will only count changes from this date for one day - which is inconvenient for rating promotion. Therefore, after big drops, before the next promotion, it makes sense to “hold” PAMM without trading for at least a month - this is exactly what is demonstrated here - several times after strong drops we see a horizontal chart - there was no serious trading at that time. #3 756% in 6 months
It is very similar to martingale, trading in a channel or another strategy based on the principle of “revenue a little, losses are huge”. Has anyone made money on Forex PAMM managers? Have you seen at least one review from a person who withdrew more money from PAMMs than he invested in PAMMs? The problem is that the very existence of such people is a big question, although from the point of view of mathematical statistics they should be - perhaps up to 1% of all who used PAMMs. How PAMM owners earn money In mutual funds, the following method of earning is usually provided - annually from one to four percent of the value of the units goes to the manager. On average - 3%. A similar scheme is used in PAMMs, but there is a small BUT. Firstly, not three percent, but from 30 to 50, and secondly, not per year, but per month J Quote from the description of the "trading interval" in Alpari:Example.
The investor activated his investment account on February 1, replenishing it with 1,000 USD at a unit price of 125. Thus:
At the same time, under the terms of the offer, the manager's remuneration is 50%.
The manager traded successfully, and on March 1, before the end of the trading interval, the share price increased by 100%: share price = 250, balance = 1,000, equity = = 250 / 125 × 1,000 = 2,000, number of shares = 8.00. We get:
Thus, if the share doubles in a month, the investor will have an increase of only 50%, and at the same time there will be an automatic remuneration to the manager. That is $500 net profit. If next month the price of the share drops to the initial value - in this case 125, then the investor will have a net loss of 25% - this despite the fact that the price of the share has not changed! A detailed discussion of this topic can be found on the forum pages: http://forum.alpari.ru/showthread.php?t=42663&page=479 http://forum.alpari.ru/showthread.php?t=42663&page=480 Let's analyze the table successive changes in the value of a share in PAMM: at the initial moment, the cost of a share is $100, after a month - $200, after two months - $100. The profitability of the manager is 50% of the profit.
Let's assume that the owner of both PAMMs is the same person who simply made multidirectional trades that gave 100% profit in one case and 90% loss in the second. In the first table, it is more correct to indicate 90% profit with a loss of 90% on the "reverse" account - 100 is indicated here for ease of calculation. Let's study how the total assets of the PAMM account holder and all four investors will change: it has risen and returned to the initial value.
As a result, the manager earned 50% of his initial investment, and investors lost 12.5% - despite the fact that the share price did not even change. The owner of PAMM accounts can constantly wind them up - and if at least one goes up, while several go down, then the owner of PAMM will make a profit - due to the fact that he can withdraw half of the funds of profitable PAMM investors. At the same time, the investor's losses on unprofitable PAMMs will be only by the value of the average greater than the net income from own funds on profitable PAMMs - due to the fact that multidirectional strategies in fact lead only to losses on the spread. Moreover, if you immediately cash out the management fee, then the amount of this fee will be the net profit of the PAMM account holder. This is because the investor shares with the owner of the PAMM account in case of profit and bears ALL the losses himself in case of a balance drop. Mathematically, everything is simple - the owner of PAMM accounts is always - exactly ALWAYS in profit. Moreover, this is a very good profit and it turns out - guess at the expense of whom.
On the alpari forum http://forum.alpari.ru/showthread.php?t=42663&page=479 this is simply commented - the investor can also withdraw profit:
You mean that the manager will withdraw his profit. This is how you withdraw Then at the end of the second month you will get $100 in your hands plus $45 in the pamma, for a total of $145.
To be honest, you can also say “as soon as you win at roulette, withdraw your profit!”. If one investor has invested in two PAMM accounts - in the above tables we take the balance of Investor 1 and 3. Let the investor withdraw profit after the first month - this is $ 500. Then on the first PAMM account after the second month he will have $500 (1000 / 2), plus $500 profit, on the second account - $1000. In total, the investor simply returned his money. In fact, the investor will lose part of the funds due to spreads and the fact that if one PAMM loses 90%, the other should show only 90% profit, not 100. Finally, a few legal aspects of PAMM accounts. I will quote Wikipedia: https://ru.wikipedia.org/wiki/PAMM
Civil Code of the Russian Federation in Art. 1013 prohibits the transfer of only monetary funds for trust management , except for cases provided for by law. Not only in Russia, but also in most other countries, asset management services are a licensed activity. As of 2012, banks and management companies that have the appropriate license from the Federal Financial Markets Service have the right to manage cash. At the same time, they cannot attract any loans secured by property under management (including using margin trading mechanisms, which are widely used both in the stock market and in forex ).
The Code also provides that the trustee makes transactions with property transferred to trust management on his own behalf, indicating that he acts as such a trustee (Article 1012 of the Civil Code of the Russian Federation). In the absence of an indication of the action of the trustee in this capacity, the trustee is obligated to third parties personally and is liable to them only with the property belonging to him. In addition, the trustee is liable to the founder of the management in full for the losses incurred. Failure to comply with the form of an agreement on trust management of property entails its nullity (Article 1017 of the Civil Code of the Russian Federation). The variants of accounts and contracts offered in Forex usually violate these norms of the Civil Code, which in disputable situations does not allow the use of legal protection.
Typically, companies that provide PAMM accounts do not inform their trustees about these norms of the law, and do not have brokerage licenses themselves.
The article turned out to be complicated - and this is also an important part of PAMM investing - the more complicated the schemes, the more difficult it is to understand them - the easier it is to attract a gullible investor, the easier it is to tell stories about "the right choice of PAMM managers", "diversification" and similar "risk management" . In fact, all these words are like passes with the hands of a magician over a hat - to divert attention and give solemnity to the moment when he takes out a rabbit. In fact, the rabbit was in the table under the hat. This article explains where the rabbit is located and why the “hand passes” that a gullible investor will make over the same hat will not lead to the appearance of a furry animal JPlus, managers monthly take off the lion's share of investors' profits from profitable PAMMs, while in the event of a subsequent loss, the investor is not compensated for anything.