What is a RAMM account: All you need to know

It's natural that newbie traders and investors can't boast extensive trading experience, so it often becomes the reason why they wipe out their entire accounts. But, oddly enough, only a few are willing to invest their time and effort and increase their knowledge. To solve this problem and help their clients save time and overcome their current lack of expertise, most brokers started offering copy trading services such as RAMM

What is RAMM

RAMM (Risk Allocation & Money Management) is a newly introduced trading and investment service that allows the broker's clients to copy transactions of professional traders. In this case, an investor doesn't need to have any profound knowledge in trading. It all comes down to choosing the most successful strategy from the strategy rating offered by the broker and copying its signals.

How to pick a RAMM strategy

You should choose the strategy for your investment very carefully. Although it's pretty easy, once you know which factors you should pay attention to:

Age of the strategy. The strategy's success should be determined not by a one-time gain but by its yield over time. You can understand how successful a strategy is in the long term from its description. Opt for strategies at least six months old and show stable growth and profitability.

Smooth growth and returns. An essential indicator of the effectiveness of the manager's strategy is the absence of sharp drawdowns on the chart. Large peaks and troughs on the chart indicate that the trader is using, for example, an inappropriate leverage ratio or an aggressive and risky trading strategy. This is not entirely reasonable in terms of investment.

Turnover and performance fees. These are the two types of commissions in RAMM. Each trader sets these parameters when creating a strategy, and the investor should consider these commissions and fees for copying transactions when choosing a suitable strategy.

RAMM advantages for investors

If you consider opening a RAMM account as an investor, let’s take a look at its key advantages:

• The main RAMM advantage is that the service allows an investor to manage risks and protect his capital by setting the Target and Protection parameters for each investment. These parameters specify the profit target and the amount of your investment you don’t want to lose if the strategy is unfavorable.

• An investor can stop investing in a strategy and withdraw his funds at any time.

• Full control of your investment. You don’t need to transfer your money to the manager’s account. All your funds remain in your account.

• The ability to diversify risks by investing in different strategies and combining both aggressive and conservative strategies.

• Fair and transparent commission schemes. Investor pays commission only if the strategy is profitable.

RAMM advantages for traders

You can earn money with RAMM by becoming a managing trader. There are no restrictions. All you need to do is to open a trading account with a reliable broker that offers the RAMM service, for example, AMarkets. And then, register a Trader's account in the RAMM system and make a deposit. With AMarkets, you can open a trading account with a minimum initial deposit of just $100. After that, you can proceed to create strategies and trading. All strategies are automatically added to the Strategy rating after the first market position is placed. Other users of the RAMM platform will be able to see the statistics of your strategy. If it demonstrates a stable yield, then investors may decide to invest in it. Now, let's take a look at the key advantages for traders.

• Two types of fee rates

Traders in the RAMM platform can charge investors two types of commission for copying their strategies. Performance fee rate is set by a trader when the strategy is being created. All investors will pay the trader a part of their profit according to the specified fee rate. Turnover fee rate. The trader receives a commission depending on the trading turnover of investments into his strategy.

• RAMM service is fully automated

All operations in the RAMM system are fully automated and don't require any additional actions from a trader in case investors want to add more funds or withdraw their profit. All transactions are copied to investors’ accounts automatically, removing the need for traders to adjust positions for investors or provide order confirmations.

• Investors manage their risks themselves

As investors select the target and protection levels for their investment, a particular strategy may ultimately cater to both conservative and high-risk profile investors, with the trader free from any need to act on behalf of the investor.

• Unlimited earning opportunities

There is no cap to the number of strategies a trader can create, allowing multiple sources of income.

• Low barrier to entry

You don’t need to start with a large amount of capital. Most brokers set their minimum deposit requirement around $100.

• Small competition

Another advantage of the RAMM system is that there’s small competition among traders. But while it’s easy to become a managing trader, it is far from easy to demonstrate consistent performance. If a trader is confident in his expertise, RAMM can provide him with an excellent opportunity to make money both from trading on his own and from numerous investors into his strategies.

As you can see, the RAMM copy trading service is a great way to make a steady income even if you don’t have a huge trading experience. It allows you to tap into the knowledge of professional traders and take advantage of their expertise. The managing traders, on the other hand, can make money from what they do best - trading.