It was all going so well …
For some time I have been trading using Alpari PAMM accounts. These ‘Proportional Allocation Management Module’ accounts allow both the trader’s and investors’ money to be in the same account with the system keeping track of who the money belongs to.
There are several pros to such accounts:
- The investor does not need a separate trading account
- Since trades are not copied, there are no slippage or other copying issues.
- The investor only pays a commission on the profits made
Alpari (did) have a great rating system for PAMM accounts. To be ranked highly, an account needs to pass a set of pre-qualification criteria:
- Has made a profit
- At least 3 months old
- At least $3,000 invested by the trader
I manage several PAMM accounts, each running a different set of strategies. Several of my PAMMs (Vesperium, Extantium and Auxilium c) are building up a good history, were climbing the ratings, and beginning to attract a steady stream of investment.
We all like to check out the competition, so I check my Alpari ratings on most days. On the first trading day of September 2019, I logged on to Alpari, looked at the ratings and said:
My account ratings had tanked! The ratings of other stable profitable accounts had also tanked! The #1 rated account was less than 3 months old, had trader investment of $300 (not $3000) and had made all its profits in the last 24 hours after a huge leverage spike – obviously a martingale!
As I checked, I saw that many of the top 10 ranked accounts were only days old (see header image). Something was very, very, wrong.
The awkward chat with support
After checking several times that I had not done something stupid with my web browser (it happens); I pinged support through the online chat. After some evasive response, I eventually got confirmation that they had, without notifying anyone, changed their rating algorithm to something called Dynamic.
I pointed out that this was placing very high-risk trading strategies at the top of the leaderboard, and was this the kind of investment that they wanted to promote. No response.
I checked the website FAQ about ratings and it still said that accounts need to meet the prequalification criteria to be ranked highest. I pointed out that they had not updated this text on their website and was told it would be updated ‘next week’ (meaning September 9th).
EDIT: October 10, 2019. I have added an article analysing today’s #1 in the Alpari PAMM account ratings.
The downward slope
Since the rating change, the amount of new investment into my accounts has dropped considerably. It also appears that investments in Dynamic Leaders have increased. I suspect that many investors have not yet realised the change and continue to base their decisions on the published positions. Since many of the leaders
EDIT: Alpari do provide tools to help identify the better PAMM accounts, but they are hard to find. In this post, I show how to find this hidden information and how I choose the PAMM accounts that I invest in.