GM Munchers! This is Pip Munch, the trading newsletter that's crunchier than a Fibonacci retracement and always on point like your stop loss. Happy Friday! Let’s finish the week strong! 💪 

On today’s menu:

• How This Trader Lost $100,000 😭 

• More Prop Firms Shut Down ❌ 

This Trader Lost $100,000!? 😭 

We all love a good trading win, but this story is a cautionary tale that hits close to home.

So, picture this: a trader is up a whopping $100,000 in profits. Life-changing, right? I mean, that’s a downpayment on a house! 🏚️ 

But then, instead of cashing out and booking that win, they kept trading... and boom 💥, they lost it all. That's $100K gone—poof.

Unfortunately, this is a true story, as shown in the tweet below.

Now, I don’t know about you, but at Pip Munch, we like to make money. And we sure as heck don’t like losin’, so let’s extract a few lessons from this gut-wrenching tale.

Lesson #1: Don't get greedy. 📉 

We’ve seen this dynamic at Pip Munch and at Lark Funding way too many times. Traders start strong, riding high on the profits, and then push for bigger and bigger gains. It’s that “just one more trade” mentality that gets them.

Here’s the reality: the market doesn’t care about your profits or your ego. If you don’t know when to close out, you’ll end up giving it all back. A hundred grand (or just $100) can turn into zero quicker than you think.

Lesson #2: Stick to the plan. ✍️

How do you know when to close a trade? Simple—before you even enter it. 100% of your game plan should be set before you press the buy or sell button.

When you're in the trade, emotions run high. You're up $1,000 and thinking, "I could turn this into $2,000!" But that’s why your pre-trade decisions need to be cold, logical, and calculated. No emotions. Just execution.

But most traders don’t even have a trading plan. And those who do often make them wrong.

👉️ So here’s the secret to a great trading plan: It should only have variables that are within your control. Cut out everything else.

Don’t include things like:

• How much money you want to make ❌ 

• How many times per week you’re going to trade ❌ 

These are outside of your control.

You’re better off writing down (yes, with pen and paper, don’t be lazy) the following:

• How much will you risk per trade?

• What hours of the day will you trade?

• Are you allowed to trade after a loss?

• Can you re-enter losses?

• What if you’re in a trade and a news event is coming in 5 minutes? What will you do?

• What timeframes will you trade?

• What do you do if you’ve lost 4 trades in a row?

These should get the trading juices flowing and if they don’t, just have enough cup of coffee. ☕️ 

Remember, a solid trading plan will save you from the rollercoaster of emotional trading. Life is emotional enough (my wife taught me that) so why add further fuel to the fire?

👉️ The Pip Munch takeaway: I’m grateful not to be the guy who lost $100,000. And you should be grateful that with the above lessons, you also won’t be that guy. ✅ 

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More Firms Are Shutting Down ❌ 

Over the last few weeks, broker-backed prop firms have been all the rage.

Some well-known (and a lot of not-so-well-known) brokers have been hopping on the bandwagon and either launching their own prop trading firms or backing others via a white label.

Now, at first glance, traders thought this was the holy grail: “Finally, some legitimacy! If they can run a brokerage, surely they can manage a prop firm, right?”

Well, that optimism didn’t last long.

Funds For Traders announced yesterday that they are ceasing operations.

The firm claims it’s because Eightcap will no longer support the MetaTrader platform for prop trading.

If the above is true, we could see a domino effect of firms crumbling under the weight of this decision. However, as of now, there’s been no confirmation from Eightcap itself or the other firms involved.

Takeaways for Traders 👇️ 

1/ Stick to firms that have been around for 12+ months.
New firms may offer shiny bonuses and easy challenges, but if they can’t withstand a shake-up like this, are they really worth your time? Stick with the tried and true.

2/ Don’t focus on flashiness. Focus on reliability and steadiness.
New and trendy firms can feel like the next big thing, but as we’ve seen, they often lead traders straight into the fire. Strong foundations matter more than trendy features.

3/ These are growing pains for the prop firm industry.
Just like the crypto industry in its early days, the prop trading space is going through growing pains. The firms that survive will be stronger for it, and traders who stick to reliable options will come out on top.

☕️ Pre-Market Fuel

1. I’ve been trying to pass a $200,000 challenge this week. See how it’s going.

2. Want a laugh? This is hilarious.

3. Goldman Sachs is predicting a recession. They say there’s now a 41% chance within the next 12 months.

🍪 Munchy Memes

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