The JForex Percent Allocation Management Module (PAMM) is a technical solution provided by Dukascopy Bank and Forex FS.
The JForex PAMM allows a Trading Strategy Provider (TSP) to trade simultaneously on unlimited connected client accounts on the basis of a limited trading power of attorney.
Depending on the size of the deposit each connected client account receives a part of the trade from the Master account according to the following ratio:
R=Connected client account balance / Master account balance
Master account balance = ∑ Connected client account balances
PAMM distributes the Master trade signal, adjusting the size of trades in proportion to the balance of each individual connected client account. The Master account is a virtual account the balance of which is equal to the sum of the balances of its connected client accounts. Total sum of all ratios under one PAMM account is always equal to 100%. TSP's activity results (trades, Profit & Loss) are allocated between connected client accounts according to ratio.
Please note that JForex PAMM automatically adjusts proportions based on currency type. Please see examples of allocation styles below.
Assume that there are 3 connected client accounts under a TSP's PAMM account.
For ratio calculation all amounts are converted in USD equivalent based on market rate.
If the TSP decides to BUY 10 million EURUSD, the PAMM will allocate the order between the three connected client accounts according to its ratio:
Resulting profit & loss will be automatically calculated for each account depending on market prices.