Last updated on 2020-07-09
In my previous post on Alpari’s change to their rating system, I expressed my dismay with the Dynamic ranking algorithm, but I did not go into detail. 6 weeks on I still feel that this is a bad rating system that is potentially misleading to investors.
In this post, I do some digging into the Alpari #1 rated PAMM account as its stands today: October 10, 2019.
The image below shows the top of Alpari’s PAMM account ratings (see the live version here).
This view is the what Alpari call the Dynamic rating. From studying this, it seems to rank highest the accounts that have made high recent gains.
Notice how the #1 account shown (as of Oct 10, 2019) is only 9 days old and has a gain of almost 8,000%. Viewing that account you will see that the trader has 2 other PAMM accounts, also 9 days old and ranked #3 and #20.
The account ranked #3, from the same trader, has attracted 93 investors who have invested over $27,000 … in just 9 days! Did you notice that text at the bottom of the other accounts list: Account archive (692).
Yes, you got that right, the trader has 692 closed accounts. Guess what? They are all blown! This trader is opening $300 accounts almost every day, most of them don’t even last the day. (Is this some profitable strategy that I do not know about? Somebody enlighten me please.)
Don’t get me wrong, I am not taking a pop at PAMM accounts, I think they offer an interesting alternative choice for investors who don’t want the hassle of managing their own trading account. But do I think that Dynamic ratings are a positive step forward for Alpari? No!
With a bit of digging and fiddling, you can create your own rating system. Here’s how I did it.