"Let a better trader trade for me" can be arranged in several ways, and the names are often used loosely. Social trading, copy trading, PAMM and MAM accounts and managed forex accounts differ in one crucial way: who holds your money and who has the right to move it. This guide sets them side by side.
What is social trading?
Social trading is the broad idea of trading as a community: you can see other traders' positions, results and comments, discuss ideas, and often copy them. Copy trading is usually one feature inside a social trading platform. You can social-trade without copying anything — simply by following and learning.
Copy trading
Your account automatically repeats another account's trades. The money stays in your account; you can stop at any time. See what is copy trading?
Mirror trading
A close cousin: instead of copying a person, you copy a fixed, rules-based strategy (often an algorithm). The mechanics are the same; the source is a system rather than a trader.
PAMM accounts
PAMM (Percentage Allocation Management Module) pools many investors' money into one account traded by a manager. Each investor's share of profit and loss is their percentage of the pool. The broker keeps the records; the manager trades the whole pool.
MAM accounts
MAM (Multi-Account Manager) lets a manager trade many separate accounts from one master, with allocation by lot size, equity or a custom rule. Unlike PAMM, each investor keeps a separate account, but the manager places the trades.
Managed forex accounts
With a managed forex account, you give a manager (often under a limited power of attorney) the right to trade your account directly. Regulated managers need a licence for this in most countries — be very careful with unregulated "account managers" who ask for your login and password.
The comparison that matters
| Aspect | Who holds the money | Who decides trades | Can you stop instantly? | Typical fee |
|---|---|---|---|---|
| Social trading | You | You | Yes | Spreads |
| Copy trading | You | The master (copied automatically) | Yes | Subscription, performance or package fee |
| PAMM | Pooled at the broker | The manager | Usually at set intervals | Performance fee |
| MAM | You (separate account) | The manager | Depends on terms | Performance fee |
| Managed account | You, with a manager's access | The manager | Depends on terms | Management and performance fees |
Which is right for you?
- Want to learn and decide yourself? Social trading.
- Want hands-off trading while keeping full control of your account? Copy trading.
- Comfortable with a manager having discretion over pooled or delegated funds? PAMM, MAM or a managed account — with a regulated manager only.
Never give an unknown "account manager" your MT5 password or send them money. Most managed-account scams start this way. See copy trading scams.
CopyTradingSystem is copy trading: your money stays in your own MT5 account at your broker, and for the package we only need your login number — never your password. Why that matters.
How PAMM profit is split — an example
A PAMM account holds $100,000: the manager put in $10,000, investor A $60,000, investor B $30,000. Shares: manager 10%, A 60%, B 30%. In a month the account makes $5,000 before fees. With a 25% performance fee on investors' profit: A's share is $3,000, minus a $750 fee = $2,250; B's share is $1,500, minus $375 = $1,125; the manager keeps $500 from their own share plus $1,125 in fees. A losing month is shared the same way — but no fee is charged until the account is back above its previous peak (the high-water mark). The figures are illustrative.
Questions to ask any manager
- Are you licensed to manage client money, and by whom?
- Is your own money in the account?
- How and when can I withdraw, and is there a notice period?
- How is the performance fee calculated, and is there a high-water mark?
- Where can I see verified results?
Why control of the money matters most
All four models can make or lose money. What differs is what you can do when you want out. In copy trading and social trading, your money is in your own account and the stop button is yours. In PAMM and managed accounts, you rely on the broker's and the manager's procedures — which is fine with regulated, reputable parties, and dangerous without them.
Frequently asked questions
Is a PAMM account better than copy trading?
Neither is better in general. PAMM gives the manager more control over pooled money; copy trading leaves the money and the stop button with you.
Is social trading safe?
Following and discussing is harmless; acting on what you see carries normal trading risk. Treat other traders' results with healthy scepticism.
What is the difference between a MAM and a PAMM account?
PAMM pools investors into one account by percentage; MAM keeps separate accounts and allocates trades across them.
