A Strategy for Investing in PAMM Accounts from Financier Jack Singer

Investing in PAMM accountsmay seem like a very simple matter in theory, but in practice you often have to wait out long periods of drawdowns with the manager, or even close the investment account at a loss.

A competent strategy for choosing a manager, as well as determining the optimal moment to enter and exit PAMM will help to avoid losses.

Today we will look at one of the investment tactics, authored by the famous financier Jack Singer, which is very original and effective.

The goal of a user of the PAMM accounts service is ideally to achieve guaranteed returns on investments with minimal risk of going into the red. The problem is that manager ratings and trading histories cannot guarantee future profitable results. A manager may blow up the account because of human error or a software failure when using robots (advisors).

The risks of losses on PAMM investments are hedged by the following tactics:

Choosing a drawdown limit is fairly simple by looking at the trading statistics; the main problem lies in diversification. The investor must choose non-periodic manager accounts capable of offsetting each other’s losses while producing an overall positive result.

Jack Singer, the famous Canadian financier and major developer who died at the age of 95 on February 2, 2013, managed to solve this difficult task.

For several decades, this billionaire actively and successfully invested in various mutual funds, distributing capital among several hundred and even thousands of trust managers, mutual funds, and hedge funds.

Gradually stepping back from business in the 21st century, he shared his own strategy for selecting investment instruments, which includes three points:

Gradually retiring in the 21st century, he shared his own strategy for choosing investment instruments, which includes three points:

Jack Singer replaced the complex formula of relative strength in the rating selection with the difference between annual profit and maximum loss. The choice of an entry point into the investment portfolio was determined by a short-period MACD, and the exit by a MACD with larger periods of the moving averages.

The famous manager offered investors of the Alpha Investment Management fund a strategy for selecting managers for trust management, based on a rating of the relative strength of performance over a six-month period. The moment of investment was determined by signalsmoving averageEMA with a 28-week period.

PAMM platform: Alpari

Indicators: MACD

Script: opamm_manbeastVo11

Indicators: MACD

Open the rating of broker Alpari’s PAMM accounts, excluding accounts with a management period of less than 4 years.

Set up the rating table by selecting with filters the columns for: account age, place in the ranking, annual profit, and maximum drawdown (for the entire time).

Compile your own manager ranking by selecting those with the largest difference (delta) obtained by subtracting maximum drawdown from annual return, while excluding negative results.

As an example, let us use the algorithm proposed by Jack Singer for the first page from the full list of the Alpari manager ranking.

Open the website page, go to the bottom of the table, and click “Full list”:

In the column windows, select an account age of more than 3 years and click “Settings,” where you enable “Annual” in the return column and “Maximum” drawdown for the entire time.

Based on the selection results, the best delta figures were found in the following PAMM accounts:

In the column windows, select the account age more than 3 years and click “Settings”, where we turn on the display in the column of profitability “Annual”, drawdown – “Maximum” for all time.

At the second stage, Jack Singer chooses the entry point into each of the selected manager portfolios using the indicator MACD. The service on the Alpari website does not provide such technical analysis capabilities. Let us use the opamm_manbeastVo11 script (it can be downloaded at the end of the article), which allows you to load trading history into the Metatrader 4 terminal, where there is a familiar trader standard set of 50 indicators.

The trading history will be loaded into a separate daily chart by pressing the “OK” key.

Recommendations for setting up, installing, as well as a description of how the script works (along with the strategy for technical analysis of PAMM accounts) can be found atpageour site.

Add two MACD oscillators to the loaded profitability chart of the PAMM account: the first with parameters 6, 19, 9; the second with 12, 25, 9.

Invest funds in this account when the fast MACD gives a buy signal:

Add two MACD oscillators to the loaded PAMM account profitability chart: the first one with parameters 6, 19, 9; the second – 12, 25, 9.

In the process of describing the strategy based on Jack Singer’s algorithm, three accounts were selected from the ranking proposed by broker Alpari, while no detailed analysis was conducted for the presence or absence of Martingale, as well as analysis under other standards of mathematical and graphical evaluation.

The proposed investment strategy removes the factor of emotions and helps systematize entries into and exits from PAMM accounts. 

Jack Singer’s ideas work quite well on modern investment platforms; also do not forget to look at our quarterly Investor’s Digest.

In the process of describing the strategy using the Jack Singer algorithm, three accounts were selected from the rating proposed by the Alpari broker, without conducting a detailed analysis for the presence/absenceMartingale, as well as analysis according to other mathematical and graphical assessment standards.

The assembled system showed:

The proposed investment strategy removes the factoremotionsand helps to systematize inputs/outputs from PAMM accounts. 

Jack Singer's ideas work quite well on modern investment platforms, also don't forget to check out our quarterlyInvestor Digest.

Installation and configuration of the script

Best regards, Alexey Vergunov
Tlap.io