Basically PAMM module joins forex trader and investor together where both are unknown to each other but they don’t need to know each other. Here is an example:
John = Forex Trader
John is well known forex trader and his trading record speaks itself but he don’t trust investors and don’t manage/trade in other people forex trading accounts on behalf of investors. He is full time forex trader with extensive knowledge and experience of forex industry. He thinks if he do good job and make thousands dollars profit but later investor don’t pay him agreed commission then he can’t do anything. So he don’t trust anybody.
Michael = Investor
Michael has one million dollar and he wants to invest in some solid business opportunity. He did search on Internet and found that John is an excellent and well known forex trader. During last 10 years he has multiplied his principal several times and his all forex trading statistics are open for public. Michael wants to do partnership with John (forex trader) and he can pay 50% commission from generated profit but Michael don’t want to transfer one million dollar to John’s bank account so he can deposit one million dollar to his trading account and then do trading on his money. He don’t trust John because although he is excellent trader but he lives in other country and is unknown to him.
John (forex trader) = Don’t trust investors
Michael (investor) = Don’t trust trader
So both parties don’t trust each other and they live in different countries.
Here PAMM module comes in action.
John opens trading account as forex trader.
Michael opens investment account as investor.
In PAMM module John (forex trader) is offering his services for all investors and he will charge 50% commission on generated profit.
Michael deposit one million dollar to his investment account and then accept John’s trading offer and allocate $500,000 to John’s offer.
Michael also accept another excellent forex trader Shawn’s offer and allocate $500,000 to his offer.
Now as trader John and Shawn can’t withdraw $500,000 + $500,000 allocated funds. They can utilize these funds in forex trading only.