What is a managed account (PAMM/MAM)?

A managed account delegates your trading to a professional manager who runs a pooled fund. Profits and losses are shared pro-rata by the capital each investor contributes. It's a form of letting someone else trade your account — with the risk always on your side.

What do PAMM and MAM mean?

They are two capital-allocation models:

• PAMM (Percentage Allocation Management Module): the manager trades a single pooled fund and each investor shares in it by the percentage they contributed. Profits and losses are split in that same proportion.
• MAM (Multi-Account Manager): the manager allocates trades across several sub-accounts and can tune the risk level per investor. It's more flexible than PAMM.

In both, you keep ownership of your capital; you only grant trading authority, usually through a limited power of attorney.

How does the manager get paid?

Almost always through a performance fee on the profits they generate, and sometimes a fixed management fee. The structure must be transparent before you commit: you want to know whether the manager earns only when you win or also when you lose, because that changes their incentives entirely.

What risks do you take on?

The same ones you'd face trading yourself, plus a third party's:

• The losses are yours: delegating execution doesn't delegate the risk.
• A manager with no clear limits can over-leverage the fund chasing fees.
• One good month means nothing; what matters is the full record, including the drawdown.

How do you choose a managed account wisely?

Demand a verified track record that shows the bad streaks, not just the good ones, and check that the manager applies a sensible risk per trade. A record with no losses isn't a virtue — it's a red flag. The rule doesn't change because you delegate: it's the same money management, executed by someone else.