During the conference “PAMM and Copy Trading: Strategies That Work for You”, presented by Marlon Llumiquinga, CXM VIP Manager, at Wealth Expo Peru 2025, the advantages of two key passive investment strategies were discussed: PAMM accounts and copy trading.
Both allow investors to generate returns without having to trade directly in the market.
The talk began with an important warning. According to industry data, between 95% and 97% of retail traders lose money. It’s an alarming figure, especially when we consider that the global market moves over 7.5 trillion dollars daily. The reasons are well known: lack of knowledge, absence of discipline, poor risk management, impulsive decisions, and overtrading.
In this context, passive investing emerges as a viable solution for those who want exposure to the markets without facing operational complexity.
PAMM vs. Copy Trading: Two Paths to Invest Without Trading
Both models -PAMM and copy trading- offer ways to delegate management, but they work differently and are designed for different types of investors.
A PAMM account (Percentage Allocation Management Module) allows an investor to allocate their capital to a professional trader who manages a pooled account. Profits or losses are distributed proportionally based on each investor’s contribution. This model is especially useful for those seeking a fully automated solution. The investor doesn’t need to make decisions or monitor trades; they simply delegate to an experienced manager.
Advantages of PAMM accounts include professional management, minimal intervention required, a profit-sharing structure that aligns the interests of both manager and investor, and a regulated framework. It is also ideal for conservative profiles or institutional investors who want market exposure without active participation.
However, disadvantages exist. Investors lack visibility into the manager’s decisions and have no real-time control over risk. If the assigned trader lacks consistency, losses can accumulate quickly. Additionally, switching managers or withdrawing funds may not be immediate, limiting flexibility.
Copy trading, on the other hand, allows users to automatically replicate another trader’s operations, but without losing control over their own accounts. Each time the trader opens or closes a position, it is executed in the investor’s account proportionally to the allocated capital. What makes this model attractive is that users can adjust their risk level, stop copying, or switch signal providers at any time.
Advantages of copy trading include full visibility of past statistics and risk levels, the ability to diversify across strategies (scalping, swing, algorithmic trading), the low capital required to start, and its usefulness as a passive learning tool.
Still, copy trading also carries risks. Selecting truly consistent traders is not easy, and some use aggressive strategies such as martingale or grid trading. In addition, technical factors such as latency or slippage may affect results, particularly when using unregulated platforms.
Which One to Choose?
The choice between a PAMM account or copy trading depends on the investor’s profile. For those who want a completely delegated experience with no intervention, PAMM is the right choice. For those who prefer to keep some control and learn from the process, copy trading offers more flexibility and transparency.
In both cases, it is essential to operate through reliable and regulated platforms. CXM offers both options with risk protection systems, clear performance metrics, and full fund security. Investing well does not mean trading more, but trading smartly — even when someone else is trading on your behalf.
You can watch the full conference in Spanish here.
