Michael Katz, CEO of Trade The Pool joined Benzinga's Premarket Prep team and gave 3 pieces of advice that all new traders should pay attention to.
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00:00No, I had a question for Michael. Michael, seeing traders come in and come and go,
00:07what are the three things of advice that you give to new traders, people that are coming in,
00:14even before they get an approved account? What would be three things that, I mean,
00:21things are always changing, there's different market conditions, but seeing a lot of people
00:25come and go, what three things, words of advice would you give the traders?
00:29Yeah, I mean, that's a great one. First of all, obviously the risk side. I see a lot of traders
00:36coming in and, you know, just swing for the fence and trying to make it on one big trade. But
00:41actually those that pass the evaluation and succeed also in the funded phase are those that
00:47start in the position with a small chunk, you know, just a feeler. So you start the position,
00:53you test the water, you understand if it's going to your direction, and then you add more to your
00:58position, something that a lot of the traders don't do, even though, you know, they maybe learn
01:03it on other courses. And we, of course, talk about it many times on our education. You got to start
01:10by testing the water. If you're risking $100 per trade, don't risk it all in one click. Start with
01:15$20 risk, add a little bit more, another 20, another 20, another 20, build your position.
01:21That way, you will have much more higher success rate, no doubt about it. And you will know that
01:27this is the right trade that you want to take. And once, you know, the stock goes to your favor.
01:33So this is by far the most important one that I see repeat itself over and over again. And of course,
01:40the other stuff are straightforward, over-trading. A lot of the guys just go and click the mouse key,
01:48you know, just want to grab that trade. But you actually need to take a step back, focus on the
01:55setups, the A plus setup, A setup, wait for that moment when you actually need to click the mouse
02:02key and not just because the stock is running. I'm looking at the, you know, some of the charts
02:06that are here, VRAX, right? V-R-A-X, just popping from $2 to $6. Some of our traders are in right now
02:16and also took some profits already. But if you look at it, in most cases, when it's running,
02:23also NVIDIA, Tesla, anyone, you know, any stock that is just running, in most cases, you want to
02:28jump in and not miss the train, right? But on those cases, in most cases, you will lose because
02:35you need to wait for that pullback. You need to wait for a consolidation before you jump in
02:40and so on. Like you said also, Dennis, about Tesla or NVIDIA jumping in at $1.25, right?
02:48So you need to wait a little bit. This is also something that I see a lot of the times going on
02:54when traders does that. And so it's kind of straightforward, you know, trading in general,
03:01the same concept, the same tips that you'll give a new trader will apply here as well.