A Lot Allocation Management Module (LAMM) trading account is a type of forex managed account where the investor’s funds are directly linked to the fund manager’s transactions.
Whenever the fund manager buys a standard lot of a currency, every account owner will automatically get a standard lot as well.
Other types of managed accounts are the PAMM and MAM.
What makes the LAMM account unique is the exclusive right each investor has to decide the number of lots that can be traded in the market. This gives investors an added level of control and flexibility over their investments.
In this articles with have gathered and reviews the best forex brokers which offer Lamm accounts.
What are the best LAMM Account Brokerages?
Below our curated list of the best Lamm account brokers, with details of features and characteristics.
What are the differences with other managed account types?
Managed forex accounts come in different forms, mainly including MAM (Multi Account Manager), PAMM (Percentage Allocation Management Module), and LAMM (Lot Allocation Management Module) accounts.
- MAM accounts allow a fund manager to manage multiple trading accounts from a single interface.
- PAMM accounts distribute gains, losses, and fees on an equal percentage basis.
- LAMM accounts allow investors to allocate different lot sizes for the fund manager to trade with, offering greater flexibility and control.
How to start trading with a LAMM trading account?
Starting to trade in the forex market with a LAMM account involves a few crucial steps.
- Choose a regulated forex broker who is overseen by a reputable regulatory body like the FCA, ASIC, or MAS.
- Verify if the broker offers a LAMM account by checking their offerings or refer to our Managed Forex Accounts list.
- Choose the fund manager to invest in. The broker will provide records and data about each fund manager to help you make an informed decision. Remember, you can hire more than one fund manager simultaneously for diversified forex trading strategies.
- Allocate your fund by checking the minimum deposit required by the broker and the fund manager. The fund manager can only access the money you’ve allocated for trading – withdrawal from your account is not available on the fund manager’s side. This provides a layer of security for your investment.
What are the pros and cons of using a LAMM account?
- You can choose the amount of lots
- You have more control on your exposure
- Invest in more fund managers to diversify your investments
- Your profits are highly dependant on the fund manager’s skill and experience
- LAMM account is hardly offered by highly regulated brokerages
How does risk management work with a LAMM account?
Risk management with a LAMM account revolves around the number of lots you decide to trade. By controlling the number of lots, you’re controlling your exposure to the market, and in turn, your potential profit or loss. For example, if you wish to limit your risk, you can opt to trade a smaller number of lots.
Moreover, you can manage risk by diversifying among several fund managers, each employing different trading strategies. This strategy allows you to spread your risk across various approaches, potentially increasing the chance of success. If one strategy underperforms, others might compensate for it. Regular monitoring and adjustment of your investment strategies also play a vital role in risk management within a LAMM account.
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