MAM Trading
A Multi-Account Manager (MAM) trading system enables experienced investors to manage several individually-owned trading accounts. The trades placed by the manager are replicated across the pool of accounts, with characteristics like trade size altered depending on the preferences and risk level set by each investor. This page will detail how MAM trading works, outlining the pros and cons as well as listing the best MAM trading brokers in 2024.
MAM Brokers
#1 - AvaTrade
Why We Chose AvaTrade
AvaTrade is a leading forex and CFD broker, established in 2006 and regulated across 9 jurisdictions. Over 400,000 users have signed up with the broker which processes over 2 million trades each month. The firm offers multiple trading platforms, including MT4, MT5, and a proprietary WebTrader. 1250+ financial instruments are available for day trading, alongside a comprehensive education center and multilingual customer support.
"AvaTrade offers the full package for short-term traders. There is powerful charting software, reliable execution, transparent fees, and fast account opening with a low minimum deposit."
- DayTrading Review Team
- Instruments: CFDs, Forex, Stocks, Indices, Commodities, ETFs, Bonds, Crypto, Spread Betting
- Regulator: ASIC, CySEC, FSCA, ISA, CBol, FSA, FSRA, BVI, ADGM
- Platforms: WebTrader, AvaTradeGO, AvaOptions, MT4, MT5, AlgoTrader, TradingCentral, DupliTrade
- Minimum Trade: 0.01 Lots
- Leverage: 1:30 (Retail) 1:400 (Pro)
Pros
- The broker’s unique risk management tool, AvaProtect, protects against losses up to $1 million and is easy to activate in the platform
- Day traders can access stable spreads and zero commissions with no hidden fees
- AvaTrade is a heavily regulated and trustworthy broker with licenses from the ASIC, CySEC and more
Cons
- There is no ECN account with raw spreads
- It’s a shame that there are no rebate schemes for serious traders looking for additional perks - CMC Markets would be a better choice here
- Traders from the US are not accepted
#2 - Pepperstone
Why We Chose Pepperstone
Established in Australia in 2010, Pepperstone is a top-rated forex and CFD broker with over 400,000 clients worldwide. It offers access to 1,300+ instruments on leading platforms MT4, MT5, cTrader and TradingView, maintaining low, transparent fees. Pepperstone is also regulated by trusted authorities like the FCA, ASIC, and CySEC, ensuring a secure environment for day traders at all levels.
"Pepperstone stands out as a top choice for day trading, offering razor-sharp spreads, ultra-fast execution, and advanced charting platforms for experienced traders. New traders are also welcomed with no minimum deposit, extensive educational resources, and exceptional 24/7 support."
- DayTrading Review Team
- Instruments: CFDs, Forex, Currency Indices, Stocks, Indices, Commodities, ETFs, Crypto, Spread Betting
- Regulator: FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB
- Platforms: MT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade
- Minimum Deposit: $0
- Minimum Trade: 0.01 Lots
- Leverage: 1:30 (Retail), 1:500 (Pro)
Pros
- Pepperstone emerges as a low-cost broker, especially for serious day traders with spreads from 0.0 in the Razor account and rebates of 25%+ through the Active Trader program.
- Pepperstone boasts impressive execution speeds, averaging around 30ms, facilitating fast order processing and execution that’s ideal for day trading.
- Now offering spread betting through TradingView, Pepperstone provides a seamless, tax-efficient trading experience with advanced analysis tools.
Cons
- There’s no simplified proprietary trading platform, nor are there any social trading features, which could be a disadvantage if you are new to day trading.
- Pepperstone does not support cTrader Copy, a popular copy trading feature built into the excellent cTrader platform and available at alternatives like IC Markets.
- Despite enhancements to its range of markets, crypto offerings are relatively limited compared to other brokers such as eToro, with no option to invest in real coins.
#3 - IC Markets
Why We Chose IC Markets
IC Markets is a globally recognized forex and CFD broker known for its excellent pricing, comprehensive range of trading instruments, and premium trading technology. Founded in 2007 and headquartered in Australia, the brokerage is regulated by the ASIC, CySEC and FSA, and has attracted more than 180,000 clients from over 200 countries.
"IC Markets offers superior pricing, exceptionally fast execution and seamless deposits. The introduction of advanced charting platforms, notably TradingView, and the Raw Trader Plus account, ensures it remains a top choice for intermediate to advanced day traders."
- DayTrading Review Team
- Instruments: CFDs, Forex, Stocks, Indices, Commodities, Bonds, Futures, Crypto
- Regulator: ASIC, CySEC, FSA
- Platforms: MT4, MT5, cTrader, TradingView, TradingCentral, DupliTrade
- Minimum Deposit: $200
- Minimum Trade: 0.01 Lots
- Leverage: 1:30 (ASIC & CySEC), 1:500 (FSA), 1:1000 (Global)
Pros
- You have access to over 2,250 CFDs across various markets, including forex, commodities, indices, stocks, bonds, and cryptocurrencies, allowing for diversified trading strategies.
- IC Markets offers among the tightest spreads in the industry, with 0.0-pip spreads on major currency pairs, making it especially cost-effective for day traders.
- As a tightly regulated and widely respected broker, IC Markets prioritizes client security and transparency, helping to ensure a reliable trading experience globally.
Cons
- There are fees for certain withdrawal methods, including a $20 wire charge, which can eat into profits, especially for frequent withdrawals.
- The breadth and depth of tutorials, webinars and educational resources still need work, trailing alternatives like CMC Markets and reducing its suitability for beginners.
- Interest isn't paid on unused cash, an increasingly popular feature found at alternatives like Interactive Brokers.
#4 - Eightcap
Why We Chose Eightcap
"Eightcap delivers in every area for day traders with a growing selection of charting platforms and AI-powered tools. Now sporting 250+ crypto CFDs and the Crypto Crusher market scanner, it's also become a stand-out choice for crypto trading, winning our 'Best Crypto Broker' award two years in a row."
- DayTrading Review Team
- Instruments: CFDs, Forex, Stocks, Indices, Commodities
- Regulator: ASIC, FCA, xCySEC, SCB
- Platforms: MT4, MT5, TradingView
- Minimum Deposit: $100
- Minimum Trade: 0.01 Lots
Pros
- With tight spreads from 0 pips, low commission fees, and high leverage up to 1:500 for certain clients, Eightcap provides cost-effective and flexible trading conditions that can accommodate an array of strategies, including day trading and scalping.
- Having excelled across all key areas for day traders, Eightcap outperformed more than 490 competitors to win our 'Best Overall Broker' award for 2024, also securing our 'Best Crypto Broker' title.
- Eightcap stands out with a selection of powerful trading tools, including MT4 and MT5, the innovative algorithmic trading platform Capitalise.ai, and more recently the 50-million strong social trading network TradingView.
Cons
- Despite a useful library of educational guides and e-books, Eightcap still trails IG’s comprehensive toolkit for aspiring traders with its dedicated IG Academy app and 18 course categories.
- Eightcap needs to continue bolstering its suite of instruments to match category leaders like Blackbull Markets with its 26,000+ assets, featuring a particularly weak selection of commodities.
- The demo account expires after 30 days and can only be extended upon request - a notable inconvenience compared to the likes of XM with its unlimited demo mode.
#5 - RoboForex
Why We Chose RoboForex
RoboForex is an online broker, established in 2009 and registered with the IFSC in Belize. Traders can choose from five accounts (Prime, ECN, R StocksTrader, ProCent, Pro) catering to different needs with trades from 0.01 lots and spreads from 0 pips. RoboForex has also enhanced its offering over the years, adding CFD instruments and launching its stock trading platform, plus the CopyFX system.
"RoboForex is great if you want a vast range of 12,000+ day trading markets with ECN accounts, powerful charting and loyalty promotions. It also stands out for stock traders with its user-friendly R StocksTrader platform, featuring 3,000+ shares, fees from $0.01 and sophisticated watchlists."
- DayTrading Review Team
- Instruments: CFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures
- Regulator: IFSC
- Platforms: R StocksTrader, MT4, MT5, TradingView
- Minimum Deposit: $10
- Minimum Trade: 0.01 Lots
- Leverage: 1:2000
Pros
- RoboForex is known for its tight spreads starting from 0 pips and low minimum deposits from $10, making it accessible to those on a budget. The ability to trade with micro lots further lowers the barrier to entry for new traders.
- The broker offers leverage up to 1:2000 for certain account types, which is among the highest in the industry. This high leverage allows day traders to maximize their trading potential, albeit with a corresponding increase in risk.
- The broker offers two commission-free withdrawals each month in the Free Funds Withdrawal program, helping day traders to minimize transaction costs.
Cons
- Despite 15+ years in the industry and registering with the Financial Commission, RoboForex is authorized by one ‘Red-Tier’ regulator – the IFSC in Belize, lowering the level of regulatory protections for traders.
- RoboForex provides a variety of account types, which, while offering flexibility, can be overwhelming for newer traders trying to choose the most suitable option for their trading style. Alternatives, notably eToro, provide a smoother entry into online trading with one retail account.
- While RoboForex offers competitive spreads, some of its account types come with high trading commissions up to $20 per lot, trailing the cheapest brokers, such as IC Markets.
How MAM Trading Works
MAM trading, sometimes shortened to multi-account trading (MAT), entails a master trader or fund manager to carry out trades for multiple users through a single terminal. The managed trading accounts of each investor and individual trader are combined into a large pool that is managed by the master trader. Any orders executed by the MAM trading manager are split amongst the associated accounts as per the risk appetite and available capital of each user.
Master traders utilise software from a MAM trading group or corporation that allows them to execute trades on behalf of their clients and investors. Some of the best MAM software and tools are compatible with industry-recognised platforms, such as MetaTrader 4 (MT4).
Deposits & Withdrawals
Deposits and withdrawals for the individual sub-accounts within a MAM trading pool are handled by the investors and traders themselves; the fund manager cannot request deposits or withdrawals from their clients, they solely manage the trades.
Fees
MAM trading often has associated fees and stipulations, such as minimum deposits. Minimum deposits can vary from low and accessible to up to tens of thousands for premium packages and more experienced master traders.
MAM trading users pay a fee to the master trader based on their performance, often by way of a percentage of returns. This incentivises the fund manager to be careful with your money and make the best trades. Some master traders also charge management fees to the brokers themselves in the form of an ongoing fixed percentage fee, though this is uncommon.
MAM Trading Example
The best way to conceptualise and understand MAM trading is to run through an example.
Suppose you invest $20,000 into a MAM forex trading account and you are allocated or have selected an experienced trader with a swing trading strategy.
If the first week’s investments earn you 30% gains, by the end of that week your balance will sit at $26,000 ($20,000 x 30% = $6,000).
However, the MAM trading manager will take a commission from these profits, for example, 20%. As a result, the fund manager would take $1,200 ($6,000 x 20% = $1,200) from your profits, leaving you with a final balance of $24,800 after the week’s trading, giving you a net profit of $4,800.
MAM Trading Strategies
Master traders execute trades either by equity size or lot allocation.
Equity Size
An example of equity size MAM trading management is as follows. Consider a multi-account manager that has five investors with a range of investment sizes totalling $50,000.
The MAM trading manager could execute a 10-lot position on EUR/USD in the master terminal. The respective trades of each investor would then be:
- Investor 1: $12,000/$50,000 * 10 = 2.4 lots
- Investor 2: $15,000/$50,000 * 10 = 3 lots
- Investor 3: $5,000/$50,000 * 10 = 1 lot
- Investor 4: $10,000/$50,000 * 10 = 2 lots
- Investor 5: $8,000/$50,000 * 10 = 1.6 lots
- Total number of lots: 10
Lot Allocation
For lot allocation, the trades are split by the proportion of lots each trader makes available. For example, consider two active sub-accounts within a MAM trading pool that have lot allocations of 2 and 3 lots, respectively.
If the master trader again makes a 10-lot trade, the trading volume for each sub-account would be:
- Investor 1: 2/5 * 10 = 4 lots
- Investor 2: 3/5 * 10 = 6 lots
As you can see, it is a very similar approach to equity size MAM trading, only the investors put forward relative trade sizes rather than specific equity amounts.
MAM Vs PAM Vs LAM
There are some key differences between Multi-Account Manager (MAM) trading, Percentage Allocation Management (PAM) and Lot Allocation Management (LAM) solutions.
PAM terminals enable investors to allocate a portion (as a percentage) of their total trading capital to copy trades from a master. PAM solutions also allow you to follow multiple traders and diversify your portfolio by allocating different percentages to different investors.
On the other hand, LAM trading gives the power to the investor to choose the number of lots that can be traded by various master investors. LAM trading is essentially a more basic version of PAM solutions that aim to lower the risk of trading losses.
Pros Of MAM Trading
There are several advantages to MAM trading:
- Transparent form of investment
- Range of account types available, usually Full, Mini and Micro
- Provides several levels of control for both the trader and investor
- There are no restrictions on the number of trading accounts and deposit quantities
- Simple and time-efficient as you don’t need to watch and actively analyse the market yourself
- Client portions can begin at 0.01 (1000 units) lots per trade, which is accessible for those with less capital to invest at once
Cons Of MAM Trading
Despite the benefits, there are a few disadvantages to MAM trading:
- It can be difficult to interpret the records of a MAM master without high-level tools
- It can be challenging for a MAM system to calculate the correct number of lots to be allocated, especially when there is a big difference in the balance or equity size of individual user contributions, sometimes leading to disproportionate trade shares for larger accounts
- If the master trader opens a 0.01 lot position this will usually only be allocated to the individual trading account with the greatest balance or equity
- Dishonest investors might steal or replicate the strategy of MAM traders, largely by copying the trades in real-time in their own, separate account
How To Start MAM Trading
To start MAM trading you first need to find a suitable MAM trading broker. When choosing a provider, there are a few important factors to consider:
- Fees – Charges vary between MAM trading companies so ensure you are comfortable with the fee structure and that the minimum deposit is within reach. Also look out for any hidden fees and charges for deposits or withdrawals.
- Regulation – Regardless of the style of trading, you should always choose a provider regulated by an independent body, such as the FCA in the UK. This will help to protect you from scams, keep your money safer and provide you with legal recourse in the event of dishonest practice.
- Platform – Most MAM trading solutions will use MT4 though some may leverage a different platform or use a bespoke service.
- Demo – Consider trying out a provider first by using a demo solution. Paper trading accounts allow you to trial the platform and company, ensuring it best fits your needs before you commit. This is all done in a safe, simulated environment with real-time market conditions but no real capital.
- Requirements – Requirements will differ between each MAM trading brokerage. Everything from minimum deposits to geographical availability can vary. For example, if you’re looking for a MAM solution for international trading then check this option is available to you.
- Master trader – The risk factor of MAM trading will mostly depend on the profitability of the master trader, much like investing in a hedge fund or ready-made investment portfolio. While managers are often experienced, it’s important to do your research. See if you can find any trade history of the prospective master trader running the MAM solution
Final Word On MAM Trading
MAM trading offers several benefits to both new and experienced traders. Primarily, the fact that your trades are managed for you means that beginners may earn solid profits from the markets without needing to overcome a large learning curve. Similarly, MAM trading requires very little active management, perfect for traders with little extra time on their hands. But while MAM trading also offers several levels of control for both traders and investors, there are still risks involved and you should always ensure that the company is fully regulated with transparent trading history.
FAQs
What Is MAM Trading?
Multi-Account Manager (MAM) trading allows an experienced investor to perform trades for several users through a single terminal. Individual traders put forward capital and the master trader carries out trades that are replicated for all accounts in the pool.
What Is The Difference Between MAM Trading And PAM Trading?
Multi-Account Manager (MAM) trading gives the master trader flexibility in the position size allocated to sub-accounts. Percentage Allocation Management (PAM) trading allocates positions to sub-accounts based on the size of their investment relative to the total pooled equity.
How Does MAM Trading Work?
Multi-Account Manager (MAM) trading merges individual accounts and investor accounts into a large pool that essentially becomes a managed fund. Any trades the master trader makes will be replicated across the sub-accounts based on the risk level and preferences set by each investor.
Do You Need A License To Become A MAM Master Trader?
Forex traders do not require licenses but MAM forex brokers do. This means established investors can become master traders with reputable providers if they can demonstrate strong trading history.
What Does MAM Trading Stand For?
MAM stands for Multi-Account Management. MAM software enables a master trader, or fund manager, to manage a large number of individual accounts through one terminal.