PAMM stands for Percentage Allocation Management Module or Percentage Allocation Money Management.
PAMM Accounts give an opportunity for Investors that are able to Invest funds for trading, however, they lack the time or knowledge to do so. The Money Managers on the other hand, are the ones who trade and manage the Investor's funds.
The Money Managers will earn from the Fees set when creating their Offers, whereas the Investors will earn money from the profits made from the trades.
Austin and Winston are both interesting in trading Forex, however, they don't have the time nor knowledge to do so. Then we have Gregory, who is an experienced trader and he is willing to trade using other user's funds.
So now we have 2 Investors - Austin and Winston along with a Money Manager - Gregory.
Austin invests $200 whilst Winston invests $800 so now there is $1000 in the pool of funds, that means that now Austin has 20% and Winston has 80% of the Fund.
Gregory will be now trading using Austin's and Winston's funds. He will be earning from the Fees set in the Offer upon creating the Fund.
After the appropriate Fees are taken, the remaining profits for the Investors will be spread according to their share in the fund. ( Austin 20%, Winston 80% ). If the trades end up in a loss the same process will apply.