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Irrespective of your trading experience, or whether you trade a demo account or a live account, it’s likely you’ve come across the phrase ‘Multi-Account Manager for MetaTrader 4’, or simply ‘MAM for MT4’.
It will come as no surprise, many traders, even some experienced professional traders and money managers, are unsure of what a MAM applies to. Whether you are the latter or a new kid on the block, this article helps shed some light on the subject.
Multi Account Manager Defined
At its core, a multi account manager refers to a single account that fund managers or asset managers use to execute trades from. These trades are then be mirrored in other trading accounts: client accounts belonging to the fund manager. The manner in which it’s mirrored depends on predetermined allocation methods.
Therefore, with just a few clicks, money managers are able to execute trades across several accounts simultaneously. Consequently, the account they conduct trades from is termed the master account, whereas the rest of the managed accounts are known as sub accounts.
The Single Most Important Reason to Consider Using a MAM Account
If you trade simply to manage your own capital, feel free to trade using any account.
Though if you’re an investment firm or a professional trader managing client money, or a finance-savvy trader who manages your extended family members’ trading accounts, trading using a MAM account is an option. The single most important benefit is the time factor.
To illustrate, if you manage 10 accounts, with a MAM account you will only need to spend a tenth of the time you would normally use to trade all your clients’ accounts. The time saved, therefore, can be put to better use to things such as conducting research, which in turn should lead to more informed trading decisions. If you are looking to save even more time, combining your multi account manager with automated trading strategies (Expert Advisors – EAs) is an option.
Absent of a MAM solution, commanding the same pricing for trades across your sub accounts is also difficult. In the time it takes to transition from one sub account to another, the market would have already moved. In fact, for a highly traded currency such as the USD, the real-time exchange rate fluctuations can be rapid.
In a way, a MAM helps you achieve the same pricing for all your sub accounts, just like block orders help you receive the same pricing for all your trades, except block trades must be executed from one account (this is according to the local law in most countries).
Your Trading Platform: MetaTrader 4
A MAM account is powered by MAM software.
If you are using MetaQuotes’ MT4 platform to trade, using MAM for MT4 is straightforward. MAM is also available for MetaTrader 5 (MT5).
In order to operate a MAM, nevertheless, you must meet the criteria of your chosen provider. With FP Markets, money Managers are required to hold a Financial Services License in their operating jurisdiction and evidence a strong trading history. In addition, the minimum investment requirement to activate a MAM is 10,000 USD. If you do not hold a licence though can prove trading consistency over a 6-month period, a MAM could still be a possibility.
After installing the plugin and complying with the licensing requirements, you have to set the master account so it encompasses all the managed accounts – in other words, linking your clients’ accounts you want to control under the master account. You can contact your brokerage customer support if you encounter a hurdle.
On top of that, a MAM solution allows you to separate your own money from the master account if you so desire.
Depending on your trading strategy, you must decide which allocation methods work best for you. For example, if your clients demonstrate a wide risk tolerance, you can assign higher leveraging ratios to certain sub accounts. MAM for MT4 also allows you to accommodate different order types.
MAM Vs. PAMM
PAMM, or percent allocation management module, has different allocation parameters compared to MAM. Under PAMM, each sub account has a specified ratio in the master account. The ratio is proportional to the deposit amount of each account. For that reason, under PAMM, you cannot assign different leverages to each sub account, nor can you separate your own money from the master account. You also cannot have a different lot allocation across sub accounts. As the name suggests, PAMM is all about percent allocation.
MAM for MT4 is a technological advancement in software, helping money managers succeed in the Forex Market.
Grab the opportunity to use MAM for MT4 and start making better trades for your clients today.
Disclaimer: The information contained in this material is intended for general advice only. It does not take into account your investment objectives, financial situation or particular needs. FP Markets has made every effort to ensure the accuracy of the information as at the date of publication. FP Markets does not give any warranty or representation as to the material. Examples included in this material are for illustrative purposes only. To the extent permitted by law, FP Markets and its employees shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided in or omitted from this material. Features of the FP Markets products including applicable fees and charges are outlined in the Product Disclosure Statements available from FP Markets website, www.fpmarkets.com and should be considered before deciding to deal in those products. Derivatives can represent a high level of risk; losses can exceed your initial payment. FP Markets recommends that you seek independent advice. First Prudential Markets Pty Ltd trading as FP Markets ABN 16 112 600 281, Australian Financial Services License Number 286354.