Multi-Account Manager (MAM) and Copy Trading systems are both methods used in online trading to manage multiple trading accounts.
Both Multi-Account Manager and Copy Trading systems involve managing multiple trading accounts, they differ in terms of control, decision-making, risk management, and level of involvement for both traders and investors.
They have distinct differences:
MAM: Multi-Account Manager allows a trader (often a fund manager or professional trader) to execute trades on multiple accounts simultaneously.
The decision-making process in a MAM system is centralized and controlled by the trader managing the master account. Trades are executed based on the trader's analysis, strategy, and discretion. Generally, the larger the account, the larger the trade volume allocated to it. This ensures a proportional distribution of trading volume according to the size of the account and the risk that the trader or investor is willing to take.
Risk management in a MAM system can be tailored to each individual account, allowing for customized risk profiles based on account size, investor preferences, and trading strategy.
Copy Trading: In Copy Trading systems, investors can automatically replicate the trades of a selected trader (the signal provider) into their own trading accounts. Risk management in Copy Trading systems depends on the risk profile of the signal provider.
Investors essentially inherit the risk associated with the trading strategy of the signal provider they choose to follow.
Copy Trading systems are more passive, as investors simply select a signal provider and let the system automatically replicate their trades.
