What is a PAMM Account?
PAMM is an acronym for Percentage Allocation Management Module. It is essentially a trading account where one or more investors invest funds. Each PAMM account is handled by a dedicated manager, who will carry out trading on behalf of all the investors.
The profits or the losses will be shared by each investor in proportion to their investment. Having a PAMM account is beneficial for investors as it simplifies the process of investing, eliminates risk to a great extent and gives them the advantage of economies of scale.
Many traders who are not having much knowledge about doing their trades can take the advantage of the PAMM accounts as they allow them to invest in the Forex markets and also get income without having to do any trades themselves 
In a PAMM account a fund manager allocates capital as his personal investment. He then will provide details on his proposal for the investors, which includes a list of terms and conditions. The proposal contains the percentage share the investors will pay to the manager on profits and the losses will be divided between both parties, based on the share in the account.
Let us take an example, a fund manager makes an initial investment of $5000 into the account after a couple of months later he establishes a track record of his performances and decides to accept clients.
He made a proposal and decides to charge 20% commission on profits, from each client and found two investors who were ready to invest $5000 and $10000 respectively. The investment in the account is totaling to $15000.
After a few good trades his shares price build up a return of 40%
Now individual profits are calculated as:
Fund manager Deposit: $5000
Investor 1 Deposit: $10000
Investor 2 Deposit: $5000
After Returns:
Profits of Fund Manager: $7000
Profits of Investors 1: $14000
Profits of Investors 2: $7000
After commission:
(Total Fund Management)
On his deposit: $7000 + $400 (20% of $2000 [profits]) =$7400
Investor 1: $14000 + $800 (20% of $4000) =$14800
Investor 2: $7000 + $400 (20% of profits) = $7400
So at the end Fund managers get:
$7000 (profits) + $1600 ( from Commission) = $8600
Investor 1 is left with $14000 - $800(Commission) =$13200
Investor 2 is left with $7000 - $400(Commission) = $6600
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PAMM is an acronym for Percentage Allocation Management Module. It is essentially a trading account where one or more investors invest funds. Each PAMM account is handled by a dedicated manager, who will carry out trading on behalf of all the investors.
The profits or the losses will be shared by each investor in proportion to their investment. Having a PAMM account is beneficial for investors as it simplifies the process of investing, eliminates risk to a great extent and gives them the advantage of economies of scale.