The essential risk parameters
that Trade The Pool is giving us
are also gonna keep
the risk to reward in play here.
Because the number one thing
that I talk about with those traders
that are in that losing stage
also they're not focusing
in probabilities.
They're not even keeping
probability mathematics
in their favor.
And this is where I think
I’ve adjusted it.
And how do you know
that you've adjusted?
You're going to start
taking a look into your plan
and the results.
Right?
and i think that this is what
every trader
needs to look at to see
if they're doing things
the right way
or the wrong way,
because you can have the right plan
and not execute the right trades.
How's it going everybody?
First of all, I love it.
You know, the fact that you as,
presenter, as the host of the live
trading show
actually passed the evaluation, got funded.
That's incredible to see.
And this is also a great confirmation
to everyone that listening and watching,
you know, this guy is real.
You did it.
You did a few attempts
right? Before passing. Yeah. Right.
Yeah.
It took me
it took me quite a few evaluations
right in the in
the thing was getting close. Right.
One of the things that I tried to show
on the show every day,
and I think it's important
because I live by it, right,
is just trying to find consistency
because I feel like everyone can,
you know, just hit a home run.
But the truth is, we're trying
to find some kind of consistency.
Because
even if I do get to the funded stage,
I mean, that's not my goal either.
My goal is to get paid.
I think that's what everyone's looking
for, right?
Sure. For sure.
And so
maybe Mitch, let's start from the beginning,
you know,
for for the guys that
are listening right now
and maybe
also later on
as we will upload this video,
I mean, where did you start? Right.
How long ago?
The journey, the journey of trading.
Right.
Well, the journey of trading
really started back in
kind of like 2017, 2018 for me, guys,
even before the pandemic, of course,
I went to school at UCF for finance
and that's where it started, right?
I always viewed myself
as being the stock broker
on the New York Stock Exchange floor.
As a kid
at fifth grade,
I ended up, taking the stock
exchange competition.
And I was buying Apple back
then, two
that weren't that good,
IBM and Exxon Mobil.
But Apple back
then was what got me excited, right?
How did I find that trade idea?
I looked around, right?
I saw in the library those colored Macs.
Remember the Big Macs
with like the big background
and things like that?
And I saw that
versus go on to the IBM's
and the Dell machines.
And that got me interested in trading,
which brought me to UCF finance,
which eventually got me into options.
And I learned a lot about options
from different resources.
And then I learned
that options wasn't for me. Right?
Because the truth is
that it was very complex,
complicated to learn.
And another thing that I realized,
I wasn't just battling traders,
I was battling different market makers.
I was battling
different complex strategies. Right.
And whether I was going to be
buying or selling options,
I felt that selling options
made the most sense.
And that required
what even more capital guys
that I didn't have in my college days.
Right?
So I stuck to what I felt could work.
I went to equities.
I started to learn more and more about,
trying to learn about underlining asset
and relationships building.
And that's when I first just started.
I started with the penny
stock, the gurus,
the ones that everybody watches right?
I mean, I can't blame you.
I know Timothy Sykes.
We all know him.
We've all heard of him. Right?
That's where I started.
And I think that it really got me
to dig in deep into the education
so that I could understand the markets,
not just for one strategy,
but understanding
what strategy making involves.
What does risk management involve, right.
And then trying to find the sweet spot
because that's really where it takes.
It's it's not just about trading.
Right.
And I want to touch,
you know a few painful points
maybe points.
So tell us a little bit
about the losing part,
because there is a path
along the way that you're learning.
You're trying,
you know, a lot of, failures or errors.
Tell us a little bit
about those kind of elements.
I think it's so important
I talk about this in stages. Right.
Because I think that this
is what all traders go through, right?
we'll talk about it in four stages
here, guys.
Let's go to the first.
Just a losing stage. Right.
We're all going to go through this.
I feel like a lot of traders
and beginner traders.
Yes.
You'll find those few
that just immediately do well.
And that's could be beginner's luck.
Right.
But the truth of the matter is,
a lot of the beginners
are going to struggle.
They're going to lose,
lose, lose, lose, lose.
I was in that camp, too. At first.
I wanted to trade high fliers,
high day breaks
and I felt like
I just was like facing this mountain.
And I kept losing, losing, losing.
Then I realized, okay, stop trying to
just lose. Just try to survive.
That brings us to what I call
the survivor stage, right?
The survivor stage
is that trader they can trade,
but be break even, right?
Probably not even making money,
but not losing
and blowing up accounts anymore.
I think that's the first stage
to get out of. Right?
And if you're struggling,
that's the first one to do.
Then as you get into that
survivor stage,
you move into what
I call the lunch trader.
What's the lunch trader?
The lunch
trade is the guy that can just
pay for some lunch,
at least with his trading, right?
Can just buy a good meal, right?
Maybe not going to do something
life changing,
but at least starts to
get into the positive.
Understand some strategy,
finding some problems,
probably with consistency here.
On sizing
majority of the times for me
that's what that's
what was hurting me in this case.
Then we got to get
into the thriving stage.
That's what
all traders are looking to do.
And I think that sometimes
you're going to be in that thriving stage
and move back to the lunch trader stage.
So the key
is just not moving back so far
that you're back into that losing stage.
Right.
So once you're in that thriving stage,
you start to really start
honing in on your consistency
and trying to hone in on what
it's trying to stay in the zone.
Because as traders,
I believe in the in a thing
called the present, right,
and focusing on what's happening.
Right.
But a lot of times
emotions and different things
come into here.
But we lose train of thought,
we lose that focus and we fall off
into a rut,
probably moving us back to the lunch
trader stage. Right?
So there was somewhere in between there
where I felt like
I've really started to make the change
between Lunch Trader
and that thriving stage.
And a lot of this was starting
to separate the accounts. Right.
And then the account
that I was able to make happen
here was actually
the one
that I didn't expect to make happen,
which was the small cap area
which some view as the toughest trades
in the market. Yeah.
And and you know,
I always compare it to basketball. Right.
The what you mentioned about
going from lunch to thrive
and then maybe go back right.
It's like,
team that, you know, get a nice, range.
And all of a sudden
they lose the momentum
and go back
and the other team is winning
and so forth.
And, I want to talk to you about
also something that you mentioned there
where basically,
you know,
you moved from those stages, right?
From, from losing into survival mode.
What was the change in that,
you think
maybe like 2 or 3
for the guys that listening,
you know, that got you from survivor
or from losing to survivor, at least
because most traders will stay on that.
You know, most important stage. Right.
It's the one that starts to build
confidence also. Right.
Because I think that's
the number one thing
that the loser stage brings, right?
It can instantly break your confidence
as a trader. Right?
I think we all can get to that point.
What was my determinant
was I wasn't going to stop
if it took trading one share,
I would do that right.
And that's why I talk
sometimes of
just downsizing into learning.
And I think that's
one of the best things that Trade
The Pool can give you
is just the ability to work on your craft
as a trader.
It's not necessarily
only for those traders
that are trying
to just make big sums of money.
It's also for the trader.
The beginner trader
is trying to get out of that stage
and not just lose a ton of money
because trust me, I was there,
I was there, I even sold my car.
Michael, I sold my car for trading.
I rode a long board for two years.
Wow.
Because I wanted to make this happen.
Did I make that money work? No.
Believe it or not,
I lost it all in a small account
in a regular broker. Right.
And it and it
and it didn't make me run away.
Made me push more.
And what did I start doing?
Started honing
in on strategies
that I felt truly worked,
that I backed tested that I did.
I did the research to see
what was doing well.
And then I stopped trying to win.
I just tried to simply stop losing.
I think that's where a lot of traders
get it wrong.
Their mentality is just focused
on winning
versus
I'm just going to protect myself
and trades
and focus in on making small base hits.
To get into that at least survivor stage.
Amazing Mitch. Lots of knowledge here.
I'm sure the guys that listening
right now,
a lot of them are trapped
between those lines
of losing and survivor.
Try to take it to the lunch money,
as you mentioned,
and there are tons of,
tons of
information and things
you need to learn along the way.
But maybe
one of the most important thing is,
like you mentioned,
you blew some of
previous accounts, right?
With with a broker instead of doing that.
And this is something that I,
I enjoy, represent
and obviously you as well,
you know, at Trade The Pool,
it's a limited risk
trading platform, right? Yeah.
You don't have to spend the whole 5k
or 3k
that you have on a brokerage account.
Instead of that,
you can work with us, learn, craft your,
your, your trading
and basically have a, shorter
learning curve as well.
Yeah, I think I, I smile about this
because I don't think there's
too many people that smile
when they see that RIP
The, the rest in peace for the day.
And you cut me off.
But the truth is,
you should be smiling at that moment.
And why?
Because I can tell you,
I've been on the opposite end of that end
where you got the deer
in headlights look.
And if you don't get out, trust me,
you lose the holy cow.
I mean, this case is you want to get out.
So. Yeah. Because.
Because you're just deer in headlights.
Right.
And so the
the essential risk parameters,
that Trade The Pool is giving us
are also going
to keep the risk to reward in play here.
Because the number one thing
that I talk about with those traders
that are in that losing stage
also they're not focusing
in probabilities.
They're not even keeping problem
probability mathematics in their favor.
And this is where I think I’ve adjust it.
And how do you know that you've adjusted.
You're going to start
taking a look into your plan
and the results. Right.
And a little bit
we can go to the dashboard
and talk a little bit more about this.
And I think
that this is what every trader
needs to look at to see
if they're doing things the right way
or the wrong way,
because you can have the right plan
and not execute the right trades.
Right.
Yeah.
And and exactly
I wanted to go to the dashboard.
So for those of you are not familiar,
every trader gets his own dashboard.
And basically you can track your stats
and of course
the progress that you're doing.
So I'm going to share my screen
for a second and show the guys up
and how it looks
like your evaluation account,
basically the one that you passed. So.
We'll do it like this. So. Right.
So basically
you traded the mini buying power
$20,000 of buying power.
You need to reach a certain, goal,
profit target that you did,
you have max loss and so on.
And some of the interesting stats
that you have here,
a really interesting one
is your success rate 44%.
That's totally fine.
The risk reward is off the chart.
I mean, you did greatly 4.1.
So we'll talk about that.
And also the chart.
You managed to go
very nicely at the beginning
and then kind of smoothly
until you reached that target.
So take me through the risk
reward kind of thing. How you know.
So this is my biggest focus right.
If there's one thing on here
that I think you should focus on,
there's really two, right?
It's the risk reward ratio
but also the success rate. Right.
So the comparison here
is what I was talking about
the planned approach
versus actual results. Right.
So my planned approach
a lot of the times
when I'm getting into trades
is trying to first focus
on the risk to reward ratio, right.
Because this is what I mean
by mathematical probability, right?
We're all trying to find a way to where
I don't need
to focus so much on accuracy,
but if I can focus on the right
risk to reward,
I can still be in the green.
And I feel like
when I first started trading,
I did these like high
the day breakout
strategies that you needed to be 80% 90%
accurate with a 2 to 1 ratio.
Right?
So that I'm trying to get $2 for every $1
So I'm trying to get $2 for every $1
that I'm risking. Right.
You can do it as a 1 to 2.
Just depends
on where you're putting the risk
or the ratio.
I sometimes bring the reward
first versus the risk,
but that's what I started to look at.
Another thing is,
if I'm setting up for a 4 to 1 return,
do I actually achieve that?
So what I like to look at,
a lot of the times
is a 3 to 1 or 4 to 1 look.
Why?
Because this is going
to get me to the point where
I don't even need to be as good
as a flip of a coin.
That's the way I think about it.
And if I can't be
as good as a flip of a coin,
I always tell myself,
well, Mitch,
you're in the wrong business.
Then you might need
you might want to look somewhere else.
Right?
And so I started to adapt
my mathematical probability
to give me that chance
where even if I'm 40% accurate,
I mean, the green if I'm 50% accurate.
Oh, we're looking great, man.
It’s not lunch money.
This is
this is where I think a lot of traders
struggle right?
Their
Maybe the risk to reward
their setting is a 2 to 1.
But then when they look back
at the dashboard
it says they're trading at a 1 to 1.1
or a 1 to even 1.9
And this just shows
that you're not willing
to hold to the reward
and you're not willing to cut the losers.
So a lot of traders can cut the losers.
What a lot of traders struggle with
is because they've been losing
for so long,
their confidence gets depleted
that they can't hold to the winner.
They can't take that actual 3 to 1 look,
and so they run to partial gains,
or they run to the gains
because they're just scared of losing
and that scareness can
really deter
you in your trading.
So you have to look back at your plan
and seeing,
am I risking
and getting the right reward?
And then when this falls off,
slowing things down, right.
Because that's
what you're going to see here
in a little bit.
So of course
I first started with some good trades
because I think it's also important
the end of the evaluations,
what it gives you
the ability to do,
is to take your shots right.
You're only going to be able
to lose the evaluation.
So focusing on this
at the very beginning is important,
because what we're all trying to do
is the same way that I take the approach
in our competition accounts
that we have sometimes,
and I learn this
from doing more competitions
and things like this
right here on
Trade The Pool,
which was, hey, build a cushion first.
Build the cushion. Right?
Because that's what I need to do.
And on the first couple of trades
I was able to do that. Right.
On the first couple of trades,
you guys will see
I took some nice
big winners and this CHRO
the first trade that I made 184
was absolutely done
every step of the way
live right here on the show. Right.
And I think that things like this
are really where you start
to make a difference.
And one of the things
that the show helps me do
is keep accountability, guys.
And that's why
I'm fully transparent to you guys.
And I say all traders, be
fully accountable of your actions.
Find somebody maybe that keeps you there,
what I call an accountability partner,
somebody they can help you,
someone that you can call up,
I can call up Michael and I can be like,
yo, Michael,
take a look at my stats right quick.
Tell me what's going on here, Michael,
because I
sometimes can't see it for myself. Right.
You guys keep me honest on the show
all the time, right?
If I start just,
you know, risking, you know, five what?
5 to 5.
And I'm risking
just an insane amount of money.
That's quickly how we just ruined
our math, ruined
the hard work that we do.
And that's the most important trading
just don't ruin your hard work.
I'm going to touch on two points here
that you mentioned Mitch
One is,
the risk reward kind of thing.
Yeah. It's all start, I guess.
Like you said, the plan.
So instead of at the beginning,
instead of aiming for a
1 to 2 or 1 to 0.5, whatever it is,
go bigger, right?
Because you're aiming for 1 to 5,
but you will actually
get 1 to 3.
And this is also great
when you have a nice success rate.
So aim for a bigger, risk reward
at the beginning
when you're building that plan.
And second
that he touched,
on, the accountability right.
As traders we always... it's a lonely game.
So it's kind of hard
to find that extra pal to work with.
In our case,
you can definitely join
our discord community.
And then,
they also have accountability
program there.
And it works great because
once you it's like,
you know, trying to lose weight
or going to the gym,
if you have someone to go with,
you automatically give yourself
that psychology,
the success psychology that you need.
I, I agree
100% and surrounding yourself
with those types of people too, right?
You don't want to surround yourself
with losers.
I'm sorry,
but that's just the way it is, right?
That's why
I love even doing what we do here.
Right?
I, I,
I can tell you guys right now
I love being on stream with Michael Nuss.
He's a craft worker.
He's a guy that's working on his craft.
You want to surround yourself
with those types of people,
because that's what's really given me
the ability to learn
from my mentors,
different traders
out there that I talk to.
And it doesn't need to be something
that I talk to them every day,
but I just learn from them.
I take their wisdom
and I try to attach it
to certain things that I can bring.
Right?
And that really can make an impact
on your trading career.
Amazing.
Mitch, before we finish, I gotta ask you
one more technical stuff,
and then we kind of wrap it
up, tell us a little bit.
You know,
obviously the guys
that watching our show,
they know what you're doing.
But for those not familiar yet,
what is it that you're looking for.
You trading penny stocks mostly
like small caps.
Tell us a little bit about the ins
and outs of your strategies.
Gotcha.
I think this is,
as important as it is
taking the trades right now.
I'll give you guys
the gold that I like to do.
Well, one of the things that I like to do,
of course, is use one of our partners.
Right?
I think it's so important
that we offer different partners
and that Trade The Pool has for you guys.
So I'll show
you guys really quickly here.
A scanner that I use on Benzinga Pro,
which is, of course,
one of our partners
that you guys can be getting
and you can use different scanners
to find this.
What I'm doing in
the morning
is a lot of the times I'm
looking at the change
in the pre-market, right.
You're going to find some big movers
here, right?
But what I'm specifically trying to find
is five minute change percentage
and 15 minute change percentage.
So I want to find that
there's a stock here
that has, let's say
maybe 15 to 20 or higher percentage
in the morning
and then just kind of starting
to stumble out right,
starting to pull back,
starting to
give me a nice little setup
on the charts.
Then I'll be looking for it
to show up quickly on the 5% change,
but usually it's going to be like
2% or 3% or 4%.
But you see that
the stock is going up big, right?
Like this one that just popped up.
That ENV
it just went off really quickly. There.
There you goes.
ENVB.
It's up 134%.
But right now
it's only it's only change like 0.5%.
Those are ones that you want to watch.
Another thing to look at is the volume.
I'm trying to make sure that I'm
trying to trade the ones in the morning
that are closer towards
at least a million shares traded, right.
And that's going to give me the ability
to do what?
So essentially scan
the pre-market action,
trying to jump on a lot of these trades
in the early pre-market
and make some quick moves higher.
The important part
is taking smaller trades in pre-market.
Right.
And that's where I think a lot of traders
do things wrong.
They want to take a bigger swing
because the stocks make
bigger moves in pre-market.
But I'm trying to use that bigger move
to give myself risk to return.
Right.
That for that 4 to 1 outlook or 1 to 4.
Right.
So where I can go
ahead and risk maybe $0.20. Right.
But I have to make $0.80. Right.
So the stock needs to boom
a lot of these times. Right.
So with you know, the smaller size,
that's what's going to help me there.
Right?
Because then I can take multiple haircuts
and wait until I run into the runner.
Right?
And that's why a lot of times
is going to happen.
You're not going to know
it's going to be a runner.
You're going to take it
based on the setup,
take the trade
and look to see if it gets that boom.
Another thing is
I don't jump on these
after they're breaking out, right.
That's what a lot of traders like to do.
They catch the
they use momentum scanners,
they wait for the boom to come,
and then they try to get in.
That's where I feel like it's
the hardest trade to jump on.
It's like trying to jump on a moving
train, right?
You're not going to catch it
while it's moving,
but you might catch it
at the stop before. Right?
That's where I like to
look at patterns,
use my patterns, use my approaches
to psychology.
And another thing
that we've been working on during
the live
stream
is looking for psychological strategies
more than just technical strategies.
Combining the technical strategy
and then looking for things
like a psychological
washout, liquidity
pools, things like this are so important
to try to catch the momentum
of traders right?
The end of the day,
there's not one
recipe of success
that I can tell you guys.
You just need to trade this way
because if it was that way,
tell you guys right now
I get the heck out of here
and go make $1 million.
But the truth is,
that's not the way trading works.
It ebbs and flows in the way things work.
Sometimes strategies
are going to be working more than others,
and then sometimes the strategy
is going to go down.
So you have to find
what's working with
penny stocks and small caps even more.
There's times
when we got to hit the gas pedal.
There's times
when we got to hit the brake pedal right,
and I think that
this is where the hard part
goes of these small caps.
There's moments when you can find
five six runners in one day.
There's moments
when there's not a single one in play.
So keep remembering that small pre-market
look.
Quick trades
then in the intraday have do have to see
those washouts
before I go into the trade.
And I love the fact
that you have a sale and buy.
So you got long position
short positions so you can style
and and it's important
because always tell
especially to our penny stock traders.
And we got plenty of those
because we don't have hard to borrow
and other amazing features
that you always need
to look for the long side as well. Right.
The stock before it drop it pops. Right.
So, so you gotta find ways
to maybe catch that
instead of just waiting for it to drop
and then go for the short side.
So, so that's important as well.
Mitch, first of all,
thanks for the interview. It was amazing.
And I'm sure the guys that listened,
you know,
got tons of information
and knowledge from this.
And for those of you
who want to check us out,
go to TradeThePool.com.
Maybe you will be the next funded trader.
Thanks so much Mitch
and best of luck on your funded account.
Let's go.
Yeah, thanks a lot man.
And I appreciate
Trade the Pool giving me the opportunity.
And I would say
for all you guys listening in,
come over to the live
stream, come talk with me. Right.
Because at the end of the day,
if I can't help you guys,
I'm not doing what I expect to do, right?
At the end of the day,
I can't give you guys the answer.
But one thing's for certain.
I'm here for the journey,
and I'm here to battle with you guys.
Wins and losses.
You guys can learn from my wins
and my stakes.
I always talk about
how every trader
has strengths and weaknesses
that we can learn from.
So come learn with me also on the live,
trading stream.
You know, it's
not about acting like a guru.
It's more about showing you guys
a profession or approach.
So come on over.
We'll see you guys over there.