Allocation Methods
HotForex offers the following allocation method for PAMM Managers:
- Allocation by Profit & Loss (P & L)
Profit & Loss Allocation Method
The allocation by P/L is made without opening positions on the sub accounts. But when the master position is closed the allocation to the sub accounts is made with deposit/withdrawal transaction. The allocation methods by P/L are more precise in general. Their precision is always one cent regardless of the minimal volume settings. These methods are also working differently with the allocation parameters. The allocation parameters are read and allocations are calculated when the trade is closed on the master account.
All trades are only entered in the Master Account. Once a trade is closed the profit and loss of the closed trade is then distributed to the sub accounts according to their equity.
2. Trade Allocation Example:
| Equity | |
|---|---|
| Sub 1 | 1000 |
| Sub 2 | 2000 |
| Sub 3 | 3000 |
The Master Account controls the above three sub accounts. Therefore, the equity in the master account is the sum of equities in the sub accounts; in the above example $6,000. Master places a trade of 1 Standard Lot. At this point no positions are placed in any of the 3 sub accounts.
Master account then closes the trade with a profit of $6,000. At this point the profit is automatically allocated to the sub accounts.
Sub 1 will be allocated 1/6th of the profit ($1000), Sub 2 will be allocated 2/6th’ ($2000) and Sub 3 will be allocated 3/6th ($3000) of the profit.
In Summary:
- Fund Manager opens account (master account) from the HotForex PAMM website
- Fund Manager receives master account login account details. These logins will be used to enter trades in the MT4 Platform (Master Account). These log ins can also be used to login to the Trader’s Room. Where you will be able to link your Master account with your personal account where you will be receiving your commissions. From this account you will be able to withdraw the funds.
- From the Traders Room you will also be able to request changes to the specifications of your Fund.
- Trade Allocations follows the P & L method as outlined above
