LAMM Trading

LAMM trading gives investors a simple way to trade, without the need to carry out analysis and execute deals themselves. By connecting to a trader’s account, customers can automatically copy trades in return for a commission fee. Read on to find out how LAMM trading works, the pros and cons plus how to open a LAMM solution.

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How Does LAMM Trading Work?

Lot Allocated Management Module (LAMM) trading is a form of managed trading account system that works by having a central account run by a trader (money manager), to which investors can connect and automatically copy trades.

Traders’ and investors’ funds are stored in separate accounts, which are managed through a broker. LAMM software provided by the company enables the money manager’s trades to be automatically copied by the investor. No interaction is required from the investor’s side, though they can choose to disconnect and stop trading at any point.

This setup means that when the money manager makes a profit, the investor also profits. Equally, trader losses are reflected onto the investor. In return for the service, investors pay commission fees to the trader, which is usually a percentage of the profit.

LAMM trading explained

Investors have the option to set a replication ratio that determines the capital used for each trade. This flexibility allows investors to use different leverage and only participate if they are comfortable with the risk. If a replication ratio is applied, a proportion of the profit or loss will be received.

A key benefit of LAMM trading is that investors are also allowed to invest in multiple money managers at once, spreading the risk. However, the investor must deposit the same balance as the money manager, which can make LAMM trading inaccessible for some traders. Overall, LAMM trading can be a great choice for beginners or those that do not feel comfortable in analysing and executing their own trades.


Percentage Allocated Module Manager (PAMM) and Multi-account Management (MAM) accounts are alternative managed systems that allow traders to profit without executing trades themselves.

Unlike LAMM, a PAMM solution splits profits or losses among investors as a proportion of their initial deposit, minus any commission fees.

MAM is a flexible derivative of PAMM that allows trades to be allocated in a non-proportional way. This means some investors can choose to take on more risk, for example by using leverage, resulting in different returns for investors who are using the same money manager.

The key difference is that the profits or losses received using a LAMM solution are not proportional to the funds within the account, unlike with PAMM and MAM trading. Instead, if the trader buys a lot, the investor will also automatically buy a lot (or a proportion if using a replication ratio).

LAMM Trading Example

Here we provide a step-by-step example of how LAMM trading works. In this scenario, one client invests in two money managers:

In total, investor 1 makes a profit of $620.

Pros Of LAMM Trading

LAMM trading offers several advantages:

Cons Of LAMM Trading

As with all trading, there are several risks associated with LAMM trading:

How To Start LAMM Trading

To start LAMM trading, you’ll need to select a provider, select the money manager(s) and monitor the trades.

1. Select A Broker

The first decision to make is which platform to use. Below we list the most important factors when selecting a LAMM provider. Also use our LAMM Broker List to pick the best one for you.

How to start LAMM trading

2. Select A Money Manager(s)

Once you’ve settled on a provider, you’ll need to select a LAMM money manager to execute the trades. Things to consider include:

3. Choose A LAMM Trading Strategy

The best LAMM trading strategies are built upon fundamental trading rules. Primarily, diversify your portfolio to reduce risk. Professional traders will never choose to invest more than a couple of percent of their capital in a single trade, and will aim to balance high-risk assets such as cryptos with less volatile stocks.

Select a money manager that takes this approach, or construct this setup yourself through careful selection of different managers.

Final Word On LAMM Trading

LAMM trading enables investors to capitalise on the experience of trading managers by automatically copying their trades. The process is facilitated by a brokerage, who segregates investors’ and traders’ funds and provides the software to execute the trades. However, taking the responsibility away from the investor means they have to accept the consequences of the money manager’s trades – which could be a profit or a loss.


What Is LAMM Trading?

LAMM trading is the automatic copying of an account manager’s trades. This allows investors to replicate the activity of potentially more experienced traders, and receive the same profit or loss.

How Does LAMM Trading Work?

In LAMM trading, a money manager will trade using their own funds from their own account. LAMM software connects investors’ accounts to the manager’s terminal, automatically copying any trades executed by the manager.

How Do I Start LAMM Trading?

First, select a regulated provider that offers LAMM trading via a high-quality platform. Then, decide which money manager to copy based on their experience, performance history and trading style.

What Is the Best LAMM Trading Strategy?

Diversifying your portfolio is the best way to carry out LAMM trading. Select money managers that take on different levels of risk and invest in a range of assets.

What Are The Pros Of LAMM Trading?

One of the key advantages of LAMM trading is the option to allocate funds to different fund managers. Additionally, investors have the flexibility to select a replication ratio and to stop automatically copying trades at any time.