Few days ago I opened a $1,000 account with fxcm to be managed by galleonfx on my behalf.

Your letter clarify me a lot of doubts.

Please I will be grateful to you If you write me to robertocarolini@hotmail.com giving me more advice.

Thanks
Roberto

For self trading accounts, account size does matter with most brokers. One has to have enough capital in the accounts to trade the minimum lot size, in order to weather the draw downs. For example, the minimum trade size is 1 mini lot (approx. $7-20K depending on pair) at many brokers. One would be crazy to trade a $300 account, because that means the actual used leverage is at least 23-67:1. A few percent currency movement wipes out the whole account. But some brokers do allow very small trade size. For example Oanda allows you to trade as small as 1 unit base currency (about $1), so traders can still practice good money management principals even with a tiny account. Another example is InterbankFX, a MetaTrader based broker that allows 0.01 mini lots (approx. $100 trade size). This is not an endorsement of either broker, just to illustrate my point here.

However, I don’t think the size of individual account has anything to do with the volatility of account in a PAMM based managed account, as in the case of GalleonFx. PAMM means Percent Allocation Management Module, a piece of software that the broker uses to distribute the profit/loss to all the accounts from a single master account which combines the balance of all the individual accounts. The trader trades the master account as a single big account, while all the individual accounts receive the profit/loss from the trades based on its proportion in th master account.

I have been in GalleonFx since the beginning of November, and have seen 20% equity change in one day! That is very high account volatility. The only explanation is that they are using too high leverage on the account (trade size vs total account size). GalleonFx has dozens of strategies running at the same time. If many of them are in the same direction/correlated at any point, you might see high volatility in the account. They should further reduce the size of individual trades to reduce account volatility. That does NOT require raising the minimum of individual investors’ account.

Hope this clears up some widespread misunderstanding.