Best Managed Forex Trading Brokers in South Africa 2025

The main advantages of managed accounts

First, currency trading can be a high-risk venture, and while it is possible to make large profits, the reverse is also true. The risks (and the potential rewards) are magnified by the use of leverage, where a trader puts up a small amount of money to buy a very large amount of currency (with the broker lending the trader the difference). Used correctly, leverage is a very useful tool, but in the hands of the unwary, it can prove deadly. So, unless you can dedicate considerable time and effort to learning how to trade forex successfully, it makes sense to use a managed account.

Second, as well as offering greater potential rewards (and, of course, risks) than other investments, forex can help to diversify your portfolio, so you are not just reliant on the performance of traditional financial markets such as stocks and bonds.

A third advantage is that the manager is only rewarded when they deliver a profit.

The main types of managed accounts

PAMM accounts

Percentage allocation management module (also known as percentage allocation money management, or PAMM) accounts are the most commonly available managed accounts in the forex market. They allow investors to benefit from fluctuations in forex markets without having to trade themselves. You invest your funds in the accounts of professional traders, who receive a percentage of the profits they earn from trading your money. The traders can manage multiple PAMM accounts on a broker’s platform.

Critically, PAMM accounts are relatively simple, with each investor allocated a set amount of any profits or losses related to their investment. Imagine a PAMM account of US$1m that has four investors: A has invested US$0.5m, B has invested US$0.3m and the remaining two investors, C and D, have each invested US$100,000. Investor A has a 50% share in the account, B has 30%, and C and D have 10% each. Trades (and any profits or losses) are allocated proportionally to each investor’s balance.

MAM accounts

MAM stands for Multi-Account-Manager. Like PAMM accounts, MAM accounts allow managers to trade on behalf of multiple clients for a commission or percentage of any profits. This allows money managers to execute block trades for multiple clients at the same time, and easily manage risk from one account.

MAM accounts differ from other types of managed accounts in that they allow investors to follow several different trader accounts and diversify their trading capital by allocating different percentages to different traders. Each investor can select the amount of risk he wants to take and the leverage he wants to have on his account. Investors can therefore tailor their risk to the level they feel comfortable taking.

RAMM accounts

A relatively new type of account, Risk Allocation & Money Management (or RAMM) accounts incorporate the best features of PAMM accounts while giving investors greater control over their investments.

Investors earn income by following the strategies of experienced traders and copying their trades. Indeed, RAMM is also known as copy trading. The professional traders, in turn, earn a commission on any profits generated for investors.

RAMM accounts tend to be most suitable for more experienced investors.

Differences between PAMM, MAM and RAMM accounts

The biggest advantage of the PAMM is that profits and losses are allocated proportionally, according to the investor balances in the account. All investor balances are copied to a master account. Then, when the manager or master executes a trade, it is allocated instantly and proportionally to investor accounts at exactly the same prices as on the master account – something that is not guaranteed in MAM or RAMM accounts. Money managers in PAMMs are usually rewarded by charging so-called management and incentive fees. Management fees are charged from investor balances (usually on a monthly basis), while incentive fees are strictly dependent on the profits obtained by the money manager.

A key difference with MAM accounts is that the allocation of trades between master and investor accounts can be made other than proportionally. Each investor can select the risk they want to take by varying factors such as leverage and trade size. MAM accounts are thus more suitable for more experienced forex investors, while PAMM accounts are best for beginners.

The main difference and advantage for an investor using RAMM or copy trading instead of a PAMM or MAM account is that trading takes place in their own account; they do not have to deposit money in their manager’s account. This gives them complete control over their money and means they may be eligible for additional bonus programmes, such as cashback and rebates.

The main features of PAMM Forex brokers

Forex PAMM brokers are companies that, in addition to direct trading, allow traders to invest in other traders.

The role of the broker is to provide a secure, reliable platform that allows money managers and investors to interact. You should be able to review the published strategies of various managers, as well as their experience, performance history, amount of money managed, commission levels and investor reviews, so that you are well-placed to choose the manager that best suits your needs.

The systems of modern forex PAMM brokers are automated, so that an investor can simply select a manager and invest with them. The system independently and automatically distributes the investor’s money and any profits or losses.

When choosing a broker, you should take into account factors, such as how well-regulated they are. The best regulators include the likes of the UK’s Financial Conduct Authority (FCA), the European Union’s European Securities and Markets Authority (ESMA), and the Australian Securities and Investments Commission (ASIC).

You should also consider how long the broker has been established: the longer, the better.

Forex brokers will require a minimum deposit for a PAMM account. It is best for a beginner not to choose one with a minimum deposit of more than US$500, as it is not wise to risk too much money when starting in the forex market.

Overall, it is best to choose a well-established broker that is licensed by a well-respected authority, offers a wide variety of trading instruments, has responsive 24-hour support, and can deal with you in your own language.

You should also check that your broker has the ability to process deposits and withdrawals quickly, i.e. within 2 to 3 days.

While choosing a good broker is important, you should remember that it does not mitigate the inherent risk of investing in the forex market via a PAMM, MAM or RAMM account. Success or failure will depend on the abilities of the account manager or managers that you select. They may be subject to human error or simply the vagaries of the market. The FX market, like all financial markets, does not always behave as expected.

Pay attention to those managers who use stop-losses. If there is no limit on the level of loss, there is a risk of losing the entire deposit in one deal, even when investing in PAMMs. It is better to forget about using martingales altogether. (Martingale is the name given to a strategy of increasing transaction volumes in the hope of covering previous losses.)

How does a PAMM account work?

A number of parties are involved in PAMM accounts. A forex broker provides the platform that allows investors and traders (also known as fund managers or money managers) to meet and interact. The traders also use the platform to conduct their trading activities. Investors choose which managers to allocate their money to by considering factors such as performance history and the size of the commissions charged. The manager, sometimes known as the master, also invests their own money in the PAMM account and is a client of the broker.

Investors should consider the variety of strategies on offer from managers, and choose the one best suited to their risk appetite. In general, there is a trade-off between risk and reward: the less risk you are prepared to take, the lower the potential reward. You should establish the level of risk you are happy taking before investing.

Managers publish their trading strategies on the brokers’ platforms so that investors can easily review and compare them before deciding to invest in a particular strategy.

The investor signs a Limited Power of Attorney before investing their money. This is a contract under which the investor agrees to take the risk of losing money on forex trades by giving their capital to their chosen manager, who uses the pooled money (from all the investors) to trade the forex markets. The agreement also details the investment manager’s commission.

Critically, the manager can only use the money the investor allocates to the pooled fund. If an investor has a separate account with a broker, the manager cannot draw funds from that account to use in the pooled fund.

Investors sign up for a specified term, normally a month.

To illustrate how a PAMM account works, we can use the example above, where A has invested US$0.5m, B has invested US$0.3m and the remaining two investors, C and D, have each invested US$100,000. In this case, Investor D is also the money manager.

The manager proves to be very successful and generates a 10 per cent return of US$100,000. The manager deducts his commission of US$10,000, leaving US$90,000, which is then allocated to the four investors in the same proportions as their original investments. So, Investor A (who put up 50 per cent of the funds) gets US$45,000, B gets US$27,000, and C and D get US$9,000 each. The investors then decide whether to remain invested for another term or not.

Now imagine that the four investors sign up for another month and reinvest their combined US$100,000 profit, for a total investment of US$1.1m. But this time the manager loses 10 per cent, or US$110,000. No commission is deducted because there has been a loss. Instead, just the loss is deducted from the investors’ stake, again on a proportional basis. So, this time around, Investor A loses US$55,000, B loses US$33,000, and C and D lose US$11,000 each.

A PAMM master account balance contains details of the complete amount of all clients’ deposits. To ensure clients’ deposits are secure, the manager cannot make deposits to or withdrawals from managed accounts; investors alone are allowed to do so. The performance fees claimed by account managers are automatically withdrawn from the managed accounts in line with the contract terms.

There is no limit on the number of investors in a single PAMM account, but there is always just one manager. The manager invests in trades from his own account, and investors’ funds are proportionally added to this trade.

What are the advantages of PAMM accounts?

• Beginners can use PAMM accounts with no experience in Forex trading.
• They are convenient and easy to use. The investor chooses an account, invests their funds, and leaves the trading to the manager. Investing in a PAMM account can involve no more than a few hours of your time each month, whereas trading on your own requires considerable expertise and experience and a large amount of time.
• A good broker will publish transparent data on traders, allowing you to pre-select a manager based on personal preferences, such as the level of profitability you seek, balanced by the level of risk you are willing to take.
• A good broker will offer tens of thousands of different PAMM accounts, so there is plenty of choice. This should help you to find a manager who fully meets your requirements.
• You are in constant control and can limit possible losses on each open account.
• Some brokers allow you to invest from one dollar upwards, so you can stake a small amount to begin with and increase your investment if you wish.
• The manager invests their own money alongside investors’ money in a PAMM account, so there is a huge incentive for the manager to trade wisely.
• Investors can spread their money across various managers, so hopefully, if one of the traders loses money, the profit from other, more successful traders will provide a counterbalance.
• You can withdraw and deposit money in a variety of ways, e.g. through bank payments or electronic currency.
• Only the investor can deposit or withdraw funds from a PAMM account. A manager or a broker cannot do so, eliminating possible abuse or accidental errors.

What are the disadvantages of PAMM accounts?

• There is no guarantee that you will make any profit. You may even lose your money. The main risk is that the manager’s strategies on the forex market do not work out as planned. You are also at risk if you use an unregulated broker.
• You should not use a broker that doesn’t allow you to set a maximum loss limit for a PAMM account, as you could lose all your money.
• MAM and RAMM accounts offer greater control over your money and a greater ability to reduce risk.

Does a PAMM broker help you find a fund manager?

A PAMM broker should publish information on its platform that helps you compare brokers and decide which is best for you. This information should include indicators such as the manager’s performance record, showing how profitable a particular strategy has been over time. You should also be able to find data on the account age and the number of trades undertaken.

How can I become a fund manager?

If you are a successful forex trader with extensive experience in the forex market, you might consider supplementing your income by becoming a PAMM account manager.

Every broker has its own criteria, but in general, any trader who wishes to set up as a manager will be required to meet some or all of the following requirements:

• Have at least 3 years of experience in trading
• Be a licensed fund manager
• Have worked with other institutional bodies (brokers, banks, etc.)
• Be a qualified professional trader according to the requirements of a particular jurisdiction.

If you meet most or all of these requirements, then there is a good chance that you may be accepted as a fund manager.