Some tell tale signs of a trustworthy prop firm 💯

Hey Pip Surfers! Our objective is to help you get smarter about your trading in 5-minute reads.

What’s on the agenda today:

• The Fed and what we can expect going forward….. 💥

• How do you know what Prop Firms to trust? 👀

• How to invest like a billionaire 📚

The Fed and what we can expect going forward

Yesterday was the Jackson Hole Fed meeting, this gave some pretty clear direction for the market and what the Fed is looking to do in the coming months/weeks. Powell remarked, “time has come”….. time has come for rate cuts and quantitative easing to be the Fed’s policy moving forward, as expected.

Following these statements by Powell, the Fed is gonna go on its printing spree in an attempt to reduce inflation in the economy as its primary objective. Stocks can expect temporary gains and Gold can expect temporary gains, however, as we know all too well this strategy for long-term economic health is unsustainable. In the short term with this policy implemented we will see an increase in consumer spending and economic stimulus, with borrowing increasing amongst consumers.

History does tell us an interesting story about how rate cuts impact the economy and equities Here is some historical data to show:
Conversely gold rose 40% on the Sep 18, 2007 rate cut.

How do you know what prop firms you can trust? 👀

This industry in trading has been one of the most controversial yet lucrative opportunities for up-and-coming traders with little capital at their disposal an opportunity for experienced traders to risk less of their own capital and still trade with large quantities.
However, firms have been failing due to their models not being robust enough to maintain demand or, and more disturbingly, not designed for traders to win but for higher account failures to make people keep buying…

Here is one of the more recent firms that had to shut their doors:

Without much warning or clarity on the situation the company faced they shut their doors with little to no compensation for traders who were with them. They added that due to high competition and their native marketing strategy, they could not maintain operations due to the costs of staying open.
Further to this there is a company that goes by Astra Capital Group; they are willing to purchase some of these firms on their downfall, in an attempt to give possible remuneration for traders’ and previous owner’s losses. It is unclear what the conditions are for a firm to be bought out but much like how TFT was bought out, we assume there needs to be a substantial client pool they can attempt to rebuild.

So… the question is how to spot a firm that is good, reliable, and won’t close down in the next few months. Here is a list of common traits found in prop firms that last the longest:
- They have been operating for more than 2.5 years
- Do your research on the owners of these firms, ie it is not a good idea to buy from a firm backed by a few 23-year-old influencers (SFT)
- They do not offer discounts regularly. Offering discounts every month on challenges is a sign that a firm is struggling, and this type of behavior is usually escalated a couple of months before the firm shuts down.
- They are able to provide you with a MetaTrader account (for CFD traders, not futures). This implies their licensing and regulatory standards are solid.
- They offer a wide range of educational material and occasionally limited mentorships. This demonstrates the firm actually has an interest in your success.
- Last but not least, they have a proven track record of paying out their traders and don’t have many hidden rules, especially regarding their payout system.

These are just a few pointers we found that build the case for a reliable firm you are able to build lasting relations with!

How to invest like a billionaire? 😲

Gold is currently trading at all-time highs right now and with the rate cut possibility coming in September, the likelihood of the metal market rising to new highs close to $3000 is something everyone is currently watching.
Investors are turning their attention now to gold mining stocks to ride the uproar of gold in the coming years. Namely, an investor called John Paulson, who predicted the 2008 crash has some substantial stakes in 3 gold mining stocks that are all trading under $10.00 right now. They are all trading below their average price targets, making them an appealing option to investors. So are they any decent?

1. First off is Equinox Gold Corp (EQX)
   They are a Canadian gold producer currently looking to boost their stakes in mining operations across the Americas with a market cap of $1.99 billion and a forward P/E ratio of 12.18, which gives some indication they are undervalued. They recently acquired Greenstone Gold Mine GP Inc. through a secured loan, showing their capitalist colors. The average price target is around $7.56 and they are currently trading at around $5 a share.

2. Second, we have NovaGold Resources Inc (NG)
   Their main objective is to responsibly and sustainably develop a massive gold deposit in Alaska, known as the Donlin Gold Project. They are focused on mining while maintaining environmental stewardship by monitoring and enhancing salmon populations. Obviously, this gives them a reputation boost.

3. Lastly is Perpetua Resources Corp (PPTA)
   They’re making their name through a project named Stibnite Gold in Idaho, USA. They’re in the process of restoring an abandoned mine that harbors gold and antimony, an essential mineral due to reduce our carbon footprint.

Invest with care and do your own research always before buying any stocks whatsoever. This gives some insights into how the mind of billionaire investors looks at companies to invest in alongside the gold rush of XAU with the upcoming Fed decision.

Digestible Memes