Trust management: who can you entrust your capital to?

It is of common knowledge that money should be made use of, and not simply saved. The sense of money is to bring profit. There are different ways to gain money, although the international currency market Forex is the most profitable and attractive for yielding.

Statistics demonstrates that the number of clients, who allocate their assets using trust management, is increasing by 30-40% each year.   Below we will dwell on several types of trust management.

Individual trust management. In order to invest money one needs to find an experienced trader who is to have statistics of his operations on real trading accounts. You should find out the peculiarities of the trading platform applied by him on Forex. To get maximal security you should open the account for your real name. In this case the investor is only depositing and withdrawing funds whereas the trader receives the password to the trading account and an access to its management. Although it is advisable to comment on the details in the agreement accepted.

Collective trust management. This type of management appeals to those who do not have a big sum of money. Here you should analyze the guarantees as there is no legal regulation. In this situation the possible risks are significantly higher than with individual trust management, because the investor opens an account not for his name, he just allocates the funds.

Irrespective of form the trust management is at the same time a highly profitable and a partially risky investment of funds.  Remunerative – because you trust the funds to an effective Forex market participant, and risky – because you are not able to control everything, and be 100% sure of the trader’s professionalism. Nevertheless, to minimize possible risks of losses it is needed to describe all rights and liabilities for both parties in the agreement.

In this respect the third type of trust management is up-to-date, which is the participation in PAMM-system of a large and reliable broker. At the moment a line of the companies with a high status and rating offer a possibility to invest in their clients’ trading, or in managing traders, whose trading characteristics at Forex market show high yield.

There are two types of PAMM-accounts: PAMM-trader account and PAMM-investor account.

The peculiarities of these two types are that PAMM-investor account can only invest funds in PAMM-trader accounts and PAMM-trader accounts can only accept the investments from PAMM-investors.

PAMM-system has a few differences from trust management, and one of the major is that the managing trader trades mostly with his own funds and even when he accepts investments he cannot withdraw his own funds. Thus, he will always be working not only with investors’ but also with his personal funds.

An important feature of PAMM-system is risk diversification, investing funds of PAMM-investors in PAMM-accounts of various traders, which lowers the risks of losses.

For the present day, InstaForex Company offers the best by its options and conditions PAMM-system for managing traders and investors.

Added by Evgeny Galaev,
Chief Manager of InstaForex Client Relations Department

One Response to “Trust management: who can you entrust your capital to?”

  1. Lonny says:

    PAMM-system of InstaForex is the best!

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