[2014-06-25] Bitcoin Bulls: BTC-e Launches PAMM Accounts

[BitcoinBulls]

http://bitcoinbulls.com/btc-e-launches-pamm-accounts/

BTC-e adding some serious FOREX trading tools to their platform.  PAMM for cryptocurrencies is a big development. 

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[KimNam]

i'm not familiar with PAMM system
so with PAMM, we can replicate trading from another user?
and we can follow their trading strategy?
this is interesting movement from BTC-e

[BitcoinBulls]

It is essentially a form of wealth management for FOREX.  If you were to sign up for a Slave account, you can select a Master account to follow.  That means that your account will automatically replicate the trading strategy of the Master account in real time.  Your account will execute the same trades as the Master account, but scaled for the total capital in your account.  When the Master profits, the Slave profits.  Slaves profiting is in the best interest of the Master.

You can view the performance and historical trades of Master accounts to decide which to, "follow" and you can unpair your account with a Master at any time.  

You will NOT be able to see the exact trades happening in real time because if that were allowed people could just report real-time trades of top traders to other users without benefiting the Master, essentially removing all of the incentive for successful traders to use Master accounts.  However, you can view the trades after a period of time that I believe will be determined in the agreement set by the Master in this case.  

Basically, you are leeching off of the strategy of a Master and in return giving them a portion of any profits.  Your account will trade as a clone of the Master account while paired, but scaled to fit your total available trading capital.  All of this is automated and the Master doesn't have access to your account. 

[KimNam]

so the key is :
we can use slave account to replicate master account trading strategy and automatically executed the same trades as master account does (with scale to fit our trading capital)
and we pay master account from our trading profit
if our trading not profit, we are not must pay master account?
and do you know how much we must pay master account for their "service"?
is it fixed amount or by percentage?

[BitcoinBulls]

The arrangement is determined by the owner of the Master account.  Before following the Master account a Slave account must agree to the terms.  Typically if the PAMM trades result in losses then there is no fee due to the, "Master."  It is usually a function of positive returns [profits].  

So, just as an arbitrary example if I were the Master Account holder I could set the conditions such that Slave Accounts owe me 0.5% of profits made while Slaved to my account.  If trades lose money profits are negative so I am not owed anything.  If profits in your account from following my trades are 1 BTC, I will automatically receive 0.005 of that and you will keep 0.995.

You will have to check the specific conditions set by the Master before opting into their account as a Slave.    

[KimNam]

thanks for your explanation, i understand now
so there's no fee if we lose because following master account trades
and the arragement is determined by the master account, so we must read it and accept the terms before become slave account to them
okay, i'll see btc-e and try to do that
thanks for the news, i'll follow your site from now

[Chef Ramsay]

Since this is so new I'd suspect it would be wise to let some of these traders establish their brand before latching on to any one of them (there's very few providers at this point anyway). Something to keep an eye on tho.

[BitcoinBulls]

Since this is so new I'd suspect it would be wise to let some of these traders establish their brand before latching on to any one of them (there's very few providers at this point anyway). Something to keep an eye on tho.

Definitely.  I would wait for the Master accounts to establish trading history to determine the ideal account to follow.  There is also the potential for manipulation in such an illiquid market as Bitcoin.  It would be a good idea to wait a while before jumping in.

[chadwickx16]

Since this is so new I'd suspect it would be wise to let some of these traders establish their brand before latching on to any one of them (there's very few providers at this point anyway). Something to keep an eye on tho.

Definitely.  I would wait for the Master accounts to establish trading history to determine the ideal account to follow.  There is also the potential for manipulation in such an illiquid market as Bitcoin.  It would be a good idea to wait a while before jumping in.

Thanks for the advice! Looking into increasing my holdings atm, so I'll be watching this thread, unless there is another one that you know of.

[rebuilder]

1. Create a master account.
2. Realize your 'slaves' amount to more trading volume than your own account.
3. Open a new account, and start trading against your master account, confident the slaves will follow.
4. Profit.

What am I missing here? This seems to create some pretty perverse incentives.