Ex Floor Trader: The REAL Reason You're Not Making Profits (And How To Fix It!)

A stock trader with 17 years of market experience, while building and managing a trading floor responsible for large capital.

"All the big players in the world are trading someone else's capital. Market makers, hedge funds, portfolio managers, even the guys in JP Morgan, they're trading the bank's capital. So, you're detaching yourself from money. You're free to go. You're free to do logical decisions like technical decisions."

Introducing Michael Katz, a trading veteran and the man behind the world's first stock market prop firm. As a manager of a trading floor, Michael reveals his strategies and systems to help any trader excel in the financial markets.

"There were times that I needed to step away from the market, fighting the market, 40, 70 execution in a matter of minutes."

"So, how did you, as you matured as a trader, build the skill to walk away when you have to walk away? It's really about the in order for me to buy a billion shares, I need someone from the other side to sell me a billion shares. The way that I can affect you to sell me that billion shares is through manipulation. I need to tell you the market is going to crash. The world is about to collapse. The big analyst on JP Morgan telling you that you got to sell your stock and now I can buy it from you at a cheaper price."

"On the trading floor amongst your team, the few star players that would always perform or would always be calm or would always pull out good returns. What did you see in them that was different that led them to have that success?"

"You definitely."

"Ladies and gents, welcome back to another episode. I've got a stock star with me. Michael, thank you very much for flying in to be with us today."

"For sure. Thanks for having me, buddy."

"So, I want to explore because I haven't had too many stock traders and more importantly just shedding a light on the stock industry because the equities market, price action, the laws of trading are going to be the same, but the industry is evolving. You're part of that evolution. But before we get into all things prop and and the space in general, uh, and also because I was recently in in the stock exchange in New York, I'm sure we have a lot of things to explore together. But before I want to get a basis on your trading strategy, especially because you were managing proper teams and you've been involved in the traditional prop space."

"I want to explore with you strategies first of all. What is your trading beliefs? How do you trade and then we can go from there."

"Yeah, for sure. So um, you know, when I started 17 years ago, I came from a background of gaming, right? I used to play a lot of uh Counter Strike and then I moved to trading. My ex-girlfriend bought me the Robert Kiyosaki book, Rich Dad Poor Dad, and I was introduced to the stock market. So it made sense to me to start trading in general because you stay on the keyboard making decisions in real time and all of that. Um, obviously, it took me quite some time to develop to the stage that I'm at right now. Right. It started when, yeah, I tried a little bit of demo account, then, uh, opened a new account with $10,000, um, a lot of testing back and forth, doing, looking for the right solution. And, you know, when you start trading, you don't really know what you're doing, right? You learn from YouTube or, um, other channels or whatnot, but, uh, at the end of the day, you're making a decision. You made a profit or a loss. You don't really know if it's the right call or just luck. So, it took me a lot of time just to craft it and understand if I'm doing right or it's luck, right? So, that's, uh, that's the first experience that I had."

"And was your personal strategy that you were using different to the strategies used on the prop firm?"

"Yeah, most definitely. I mean, in in the local prop firm when I traded, I was the head of the traders there. We had 70 traders, um, and we traded together every day, right? But that was, I guess, six years ago, roughly. So I already, I was already a seasoned trader. I already knew what I'm doing. And back then, we mostly traded, um, reversals, you know, we just buy the dip or ICT it or SMC or whatever, you know, all of those, uh, nice and fancy words. At the end of the day, we looked for dips and and bought, uh, the market mostly."

"Would you say there is an advantage in trading the stock market or equities? Because unlike forex, which is a ranging market, here you have generally a trending and appreciating market, therefore a built-in bias potentially. Uh, does that make it easier or is it not as simple?"

"I mean, for me, it makes sense, it more sense than trading forex, for example, um, because it's not a rangy market. You can play the trend. If you buy in the dip, you can hold it for a longer time because you understand that if that's the right move, that's the right trend. Then you don't need to close your trade super fast because it's not a rangy thing. It could go easily a few days to the upside, right? So, it just makes sense more to me than, um, than trading a range market."

"And with that, with that overall trend in mind, are you more focused on higher time frames or will you go down to the lower time frame for entries?"

"So, when I started to trade, I definitely traded a one-minute chart. I love the fast pace, being on the keyboard, making the fast decisions, uh, in real time. And, uh, I always look for those nuances because when I tried to trade like 15 minutes or even a five-minute chart, it always, uh, felt like I'm missing something because on a one-minute chart, you, you can easily see the nuances like the volume increasing dramatically, um, a pool of orders coming in, something that in most cases you won't see on a five-minute chart, and also the just the momentum between the buyers and the sellers. So you see the chart increasing or decreasing and the pace, right? You look at the pace and the momentum is shifting, and then when you see that, you can understand more about the the trend or the reaction that you're supposed to see."

"Are you referring to momentum in just price action alone or momentum with the order flow as well?"

"Yeah, basically, when I started, it was definitely without the order flow. So just looking at the price action and see how fast the the chart goes from zero to two, right? So that's the main thing, um, and besides that, obviously using supply and demand areas, um, and using MACD divergence in order to understand that this is the right call or from here we're supposed to see a reversal."

"Mhm. And you, you mentioned you previously did the M1 and the fast pace, but it seems like you're not, do you weren't doing that later on with the prop firm. What was that transition and why did you have to change your strategy?"

"I mean, as long as I was with a local prop firm, I did the same thing. Um, nowadays, I'm doing less of that and more of a higher time frame, just because, you know, I'm busy. But, uh, as a trader, like a full-time trader, this is definitely my, you know, the place for me was a one-minute chart."

"Okay."

"Um, yeah."

"And would you consider yourself an intraday or scalper?"

"Yeah, 100%. I was a scalper at the beginning, uh, going in very fast and, um, you know, taking just a 10 cents, 20 cents, uh, move. Eventually, I moved, cuz, you know, when you're trading, you, you shift through a lot of, you go through a path, right? You start somewhere, then a few months later, you go to a different, uh, strategy or or your personality changed, and, um, life changed, and all of that. So, um, when I started to trade with that prop firm, I actually did a one-minute chart, but holding much longer. Um, I started holding like 18 minutes average on 18 minutes for a position, then it went to an hour, an hour and a half, and even four hours, almost the entire day, like on average. So."

"But in the end, it's still very short focused, like."

"Yeah, definitely just scalping."

"Why, why did you choose the belief of lower time frame entries and and short-term trade scalping as opposed to lower time frame entries and then following the trend on on the daily time frame, let's say, so that you can maximize on risk to reward?"

"Yeah, the, I mean, that's a great question, but at the end of the day, it's what fits you, right? You know, your personality, the way you see the structure, the the way you want to operate, uh, the time that you have in a day to invest in trading, and everything in that around this. Um, for me, it was just, I'm, I looked for the fun part in trading, right? Like in gaming, the same concept. I didn't come to, uh, in order to make big bucks or to buy the next Ferrari. I came because I love the fact that you need to make the decision in real time. That's the challenge part of it, and and already familiar with the keyboard and the mouse. So, so it makes sense to me. So, this is why I stick to the, to the one-minute, the fast-paced thing."

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"Would you say you're a competitive person?"

"I would say, yeah."

"And when you have this, this gamer competitive, I wasn't gaming myself, but just through friends that I lived with at university."

"I saw how passionate these gamers are and how intense, and they won't leave that chair for like 12 hours a day. But when you have that hyperfocus and hypercompetitive side."

"Can this be problematic in the markets where you're competing with the market? You're you're there for long hours, and maybe you should walk away. Did you feel that helped you or hindered you?"

"Okay, there were definitely, I won't lie, there were times that I needed to step away from the market, and I didn't. I still remember, you know, tons of hours of talking to the, um, my friends, and, um, I'm sending them images of me fighting the market, literally fighting the market, like 40, 70 execution in in a matter of minutes, and, um, and they sending me back, you know, you got to get off the the computer, but I, it's one of the stuff that I love to do. Till this day, right? It's a passion."

"And, um, so, yeah."

"How did you learn later on the skill of walking away? Cuz."

"I think this topic of like psychology and it's like, okay, well, if you want to avoid losses after two losses in the day, walk away and cut your losses. But in reality, to actually get up and walk away when you're in that state."

"Is one of the hardest things to do. So how did you, as you matured as a trader, build the skill to walk away when you have to walk away?"

"Yeah, you said it, the mature, right? You grew up, you started to be more than just looking for, you know, the fun in trading, but also actually make it as a profession. And then when you realize this is what you want to do and continue pursuing that passion, um, you start building those rules, right? And eventually, I went into meditations before, uh, before started to trade, before the opening bell, and do a breathing exercise, you know, during the trading. After each trade, I took a minute or two, you know, just to settle down, write a little bit about, um, what was in that trade and how can I operate it better. And this is something that you need to apply. And, you know, like in a gym, right? You want to go to the gym, you first start, you're doing some exercise, and eventually, it catches up."

"The morning routine and, and the pre-market rituals, let's say, I think lately has become very a buzzword."

"And it's also become an escapism where somebody who is not profitable, instead of looking at their edge and and finding solutions in the data, they'll just focus on the morning routine. And I think it's overemphasized. Regardless, I want to hear from someone that is that that is and was doing it. Uh, what did you do and how did it benefit you when you had these pre-market routines?"

"Yeah, you got to touch, you know, in trading, in order to become profitable, you gotta craft a lot of the topics, right? That everyone's talks about, the the risk management, the edge, the technical analysis, all of those things. And one of them is the fact that you need to work on your psychology part, your well-being, right? So in my case, as I said, I just took before every opening bell, I took five minutes, literally closed my eyes, focus on the breathing, thinking about how I will react when I will have a losing trade, and also on a winning trade. So imagining you're in a trade and it goes against you, as long as you, uh, become aware of of those situations, because when you're trading, especially on the one-minute chart, in most cases, you're not aware of what's going on. You're making a decision like an impulse, impulse decisions, right? But once you are aware on that, and and you realize this is happening now, you can step back, see the full picture, like the micro picture, and then make a more logical decision. So, so one thing to do is just five minutes before the opening bell, close your eyes, imagine how you will react. Then when it comes to really trading, and you see yourself, you know, just before you click in that revenge trade, right? Or or going all in and you want to blow the account or make it like a home run. Stop for a second, take a breath, and then understand, tell yourself, literally talk to yourself and tell yourself, okay, what am I doing? Am I doing the right thing right now? Am I making the right call?"

"Once it's there, you're good to go."

"So, so this premarket or in general meditation, the real benefit is the ability to use that muscle of pause because this thing I was saying of after two losses, just stop and walk away. I think that ability to stop is difficult, and therefore the meditation helps in in exercising that."

"Yeah. Controlling that once you reach that moment, you know."

"Okay."

"And it's like a check, another check in your box instead of, uh, looking just for the indicator, the price action, the supply and demand. You also do this. Do I need to click the mouse key right now? Am I ready for that trade to commit to that trade? If so."

"Would you also consider other things in your life in terms of if I'm having stressful things outside of the markets that you'll take time off the markets or."

"The, the morning routine was the reset. So no matter what's happening outside, I'm ready for the markets."

"I mean, it's very hard to to exercise it, right? Because if you came back from work or and your boss yelled at you, or you had, um, you know, a fight with your wife, or whatever it is, it's kind of hard to shift into that state of mind of trading. Um, you know, in Japan, they have like huge, um, bridges and once you, a gate, sorry, gates, and once you enter that gate, it's supposed to like on, um, um, spiritual, spiritual level, it's supposed to clear your mind and start, uh, again from scratch. So, so you need to do stuff like this. Obviously, it's not easy, but like in anything in life, as long as you keep practicing, you will conquer that, you know."

"And, uh, on this topic, whilst we're here, anything else you would do as a pre-market process aside from the meditation?"

"For now, at least, that was the main key."

"It's just a matter of practicing. And when you had transitioned towards a leadership position in the prop firm where you were responsible for capital, other people's, uh, well-being, other people's strategy, and coaching them, would this be something you instilled in them as mandatory, or is this something that was only really something for yourself?"

"No. When, when I started, when I joined that prop firm, um, I came with the experience and, and the tools that worked for me. Obviously, it won't work for everyone. And even so, you know, if I'm, if I'm telling you to meditate, you need to find what will work for you in that area of meditation, right? Someone can breathe, the other one can sing, whatever it is."

"Okay, interesting."

"You need to find what fits your personality at the end of the day."

"And so I brought all, all of those tools to to the prop. Uh, we did that. And again, someone took it for just listening to music. Um, someone listened to Mozart, the other guy listened to Gangster, and that was his meditation. So."

"I had one friend at university and before an exam, a big exam, he would go for a walk to a nearby, uh, forest, the woods, and he would just go by himself and scream as loud as he could to the point where he said it would completely drain him. He would have no voice left. And he said that would just help him reset, get rid of all of his anger, emotions, whatever, and have complete clarity. So it is interesting the word meditation has a multiple layers and and different benefits depending on the personality."

"Yeah. Because when you hear the word meditation, you always think of a yogi guy that sits in the home and stuff like that, but at the end of the day, it's just something that resets your mind."

"Mhm."

"Right."

"Awesome. So when you, when you came into the leadership team, uh, and you were responsible for other traders on the prop, what other things did you instill aside from this routine?"

"Still."

"In, uh, what other things did you do or tell them to do, uh, in terms of strategy or routine, or what other things did you teach them?"

"Okay. So, so we started by building their mindset that trading is a business, right? A lot of the times, you see guys that are going into trading just because they want to make a lot of money, and they never think about how much they're going to invest in their business, how is the risk management of the business looks like, um, the expenses, the ongoing expenses, and the process because trading, in most cases, you won't make it on your first day, right? You will need to have at least, back in the days, you will need to have at least like two years, three years in order to start see some progress. So, um."

"These traders, they were already traders, or they were new people that you would coach up before you gave them capital?"

"So, most of them were like six till a year, six months till a year of experience in the market. So we taught them, then traded with them every single day. We had coaches, um, we had, you know, meetings before the market open, in the middle of the day, at the end of the day. A lot of just teaching them about, like I said, the business-wise of trading, understanding that, okay, this is an investment you put in, and you need to handle your expenses, you need to handle the risk, uh, side of it. Um, you know, there were guys that had a wife that told them, 'You gotta quit this thing, right?' And then you need to talk to your wife and and tell her, 'Listen, before you start doing trading, you need to talk to her and tell her this is what I'm looking to do. This is what I want to do. I need to take a full year in order to accomplish, uh, whatever it is.' If you do that, then your house becomes something that is very easygoing, right? If you get what I'm saying."

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"Yeah, cuz they already have the pressure from the market. You don't want the pressure from the partner as well."

"100%."

"It, it seems like when you were in this, uh, leadership position, you were focusing a lot on psychology, routine, rules. Um, where was the time, or when was the time to speak about technicals, edge, and actually strategy, or would you allow each trader to have that freedom to explore their own edge, or would there be one prop firm common strategy?"

"No. So first of all, you got to give the space to a trader, right? Because you're trading differently than what I'm trading. And even if I, I will tell you and show you what I'm doing, it's not necessarily it will fit you, right? So you got to develop your own edge and your own way or approach to the market. That's, that's the main key. What I can give you is just a structure. I can teach you on why the market moves the way it does. I can teach you about the the areas of supply and demand. I can teach you about patterns. But at the end of the day, if you like to trade breakouts, and I like to trade reversals, that's totally fine. I can give you rules on how to be better on breakouts, right? The those nuances, eventually, you will take them and build your own strategy."

"And how did you know when someone was in exploring phase, phase, and had the freedom to find what suits their personality versus he's ready, let's put some capital behind him, just so that they're not learning on someone else's money?"

"Yeah, you see it on, once you talk to a trader, and it go, it will go through some phases, and you see, you've seen the guy learning from, you know, just understanding what I'm trying to explain to him, and then he takes it, and he will show you. We will have, we had routines like, uh, he starts to build a playbook, right? So he will show you exactly what he's looking for, how he's going to operate it, um, you know, exactly how to execute the trade, to scale in, where does he supposed to take his profit, everything around it. Once you understand that he knows what he's talking about, and you see a few good playbooks that he's, uh, trading, uh, with, then you start giving him the money. And also, you build it, and, uh, because you have a team mentality on a prop firm, because it's not just now my money and my decisions, now other people's money, and, and an office environment."

"What did you sense in traders as an advantage to be in that environment? Because."

"I'm seeing a lot of disadvantages of, okay, you have other people's money, pressure. You have somebody watching over your shoulder every day, pressure. You have, um, maybe a sense of performance anxiety. So you don't trade when you had conviction, but you don't do it. And then also this idea of, um, I have a trade. The guy next to me is also my profit has the opposite idea. Now we have conflicting ideas, and and now I can get confused. So I'm seeing all of these negatives. What were the, the positives of why someone would want to be in this environment?"

"You start from the beginning by teaching them that all the big players in the world from day one are doing exactly that. Trading someone else's capital. Market makers, hedge funds, portfolio managers, all of them are trading someone else's capital. Even the guys in JP Morgan, they're trading the bank's capital, right? And they are the top-notch traders in the world. So once you understand, once you, you explain to the guy that this is how it should be, now we're saying, okay, the other guys are doing it. So now I need to do that the same way. And trading someone else's capital is a great, a great way to do so because you're not risking your own money. So you're detaching yourself from money."

"Oh, so potentially it's easier because it's."

"Much easier. This is, this is definitely one of the main points for me that shifted my mind as well when I started to trade someone else's capital. I'm not talking about family, right? Friends, friends and family, because when you do that, it's super hard. I did that. It was super hard because you're still very much attached to it, right? You don't want to lose your, your dad's, uh, money. But when it's someone else that you don't really care about, that's it. You're done. You, you're free to go. You're free to do logical decisions like technical decisions."

"In the book, uh, Mastery, from Robert Greene."

"He explains what mastery is. And and part of it is having a flexible mind. And what he, what he means by that is when you're a child, um, the child, the child is very free. He will do whatever he wants. Right now, if a child was in this room, he would stand on this table and start screaming because he doesn't have the conditioning of what's appropriate. So, he said, as you get older, go through life, your thoughts, sit this way, be quiet like this, walk like this, talk like this, wear like so, you get a lot of conditioning. And therefore, you go from a flexible mind to a rigid mind."

"And I think a lot of the industry can do that to a trader without people realizing. When you're scrolling on TikTok, when you're watching YouTube videos, this is conditioning. Yeah. And maybe you're getting the conditioning from people that are not qualified to you."

"Did you find a benefit in getting traders in terms of six months of experience? Because you could also get traders that had 10 years of experience, and they have a lot more market experience. They have a lot more strategy. Why would you pick the younger new trader? Is it for this flexible mind approach?"

"Yeah, 100%. Because when you have someone that is doing it for 10 years, even if he's a good trader, you cannot really push him to the next level. You can, but it will be much harder to give him tools that he will actually, uh, take and use them in the market. But when you take in someone, exactly as you said, like a kid that just started to play with this toy, you can give him so much, and he, and he will be a sponge, and he will take it and be happy about it, cuz he wants to try this one, and he wants to try this, and everything, uh, is much more gamey, like, and not just, um, you know, rules."

"Cuz even, let's say with the kid example, uh, a kid might go climb something that's a bit too high for him to jump off, and he will jump without fear until he hits the ground and realizes, 'Oh, that hurts. I won't do that again.' But again, this is, this is complete openness. And, uh, when you have a new trader, you're, you're allowing them to fall in a in a safe environment because it's not their money. And I think a lot of traders in this day and age give up on trading because they burnt too many accounts. They burn through the capital, and they are learning lessons, but they're too expensive lessons because it's all of their savings. But in a controlled environment, I can actually see these benefits."

"What about the idea of on the same team, on the same prop firm, you're managing the same capital, but you have, uh, people having different ideas, different trades, even on the same day, one guy's buying, one guy selling. How did you, as a leader, navigate that between peers?"

"So, what was the one way that we took there was to build teams, right? When you have one guy that is making the decision and only seeing what he's seeing, you kind of lose the ability to to have more eyes or, and you only got your opinion. But actually, when you have a team, like two, three, five traders together that trade the same account together, that way you get, you can watch more trades, you can watch more, um, um, more opportunities to find the next one. And you have a guy that is focusing on finding the stock. You have a guy that is managing the trade, a guy that is executing. So."

"Oh, you divide responsibility?"

"They're working together. They, they're leaning on each other."

"What, what about risk? Would you allow the individual trader to choose their risk within a certain range?"

"Within a certain range. Yeah."

"But it wouldn't be externalized to another person and say, 'Okay, this person is responsible for risk,' or it would be the individual trader chooses their risk."

"So, but within that team, let's say, three guys team, you have the guy that is managing the trade or managing the risk. So he will be the responsible on the, on the capital, right?"

"Obviously, the other guy can tell him something, his opinion, but at the end of the day, the decision of that will be under the guy that's managing the trade."

"And who in the team, between these multiple roles of a leader or risk or whatever the different categories were, you say has the toughest job? Who had the most pressure?"

"Um, that's a good one. I mean."

"Sounds like the guy with the managing the trade."

"I, I would say the execution. Yeah. The managing the trade and execution. Um, because the guy that, but at the end of the day, if the guy that executed the trade did it perfectly, but the stock wasn't the right asset to trade that day, then the first guy blew it. Also, a lot of the times when I get in a trade that I have confidence in, I'm, I'm more willing to watch the retracement and feel okay. But if it's a trade that I know I shouldn't have taken, I'll very quickly exit. Meaning to say, my confidence in the trade affects my ability to follow the plan. When you have someone who is, uh, just managing the trade, he doesn't have the belief in the trade because he didn't come up with the idea. He didn't place the trade. He's just there to manage it. So when you have no emotion involved, does that help or does that, that actually cause maybe mismanagement at times?"

"Yeah, it definitely helps. But, um, at the end of the day, when, when they start to work as a team, so if, uh, anyone can help each other, they will do so. So at the end of the day, we saw some success."

"In the end, as the leader, would all trades go through you, or you would allow?"

"No, each one takes the responsibility. Yeah. Obviously, we will watch the trades. I obviously traded, uh, with them together and made the decisions. Sometimes I sat with the teams, like separately. I took three guys, sat with them, traded with them on the same day. Um, we did a lot of back testing at the end of the day, journaling, obviously, as well. Yeah."

"Would, would you have different strategies amongst the traders?"

"Uh, as a form of diversification, I guess?"

"One, and second thing, like I said before, it's, um, it's a personality thing, right? So, so again, if you, if you understand how the structure of a reversal builds, then you need to continue to trade that way. But if you're more of a quick scalper that wants to get in, uh, very fast on the breakout, that's one thing. And as long as it's working for you, then great."

"And on the prop, what was your personal favorite trade, A+ setup?"

"What was."

"Your favorite trade type, like an A+ prime setup?"

"So for me, it's always the reversal. Um, you know, you will see a stock. I used to trade two ways. So one will be stocks in play, which are stocks that are gapping up or down, and, and they're gapping dramatically, like, let's say, 10% down, a stock is gapping down because of earnings, let's say, and then once it drops and reaches a a major key level, then you buy the dip, or the opposite way, it pops up, reaches a certain, uh, resistant level, and then you sell the top."

"You know the phrase where it's like, you don't want to catch a falling knife. You don't want to buy in a heavily bearish market. How did you."

"Reversal trade effectively and not just, uh, try keep trying to sell the top in a bullish market?"

"Yeah. So that's a great question because obviously you don't know, right? You, you will never know until the end of the, the move. But you are, but you do have key elements that support what you're looking for, right? So when a stock is dropping down and it reaches a a major key level, then it makes sense that it will stop at least for one pop, right? And then, uh, you look at the volume. You want to see increased volume, capitulation at at the bottom, right? So buyers are coming in, while sellers are getting hacked or, um, or manipulated."

"How would you view that manipulation on price action?"

"So on the price action level, you got a few ways. First of all, um, in a lot of the times, you will see, um, few trends before the pop. So you will see a drop, then a tiny bounce, another drop, a tiny bounce, and then on the third wave or the third, uh, move to the downside. In most cases, you will see that, uh, capitulation, you will see high volume coming in at the bottom of the resistance support level. And, and if you compare the, the drops, right? You have the first drop, then the second, and the third. If you compare them, you can find some nuances that will tell you that the, uh, sellers are getting much weaker. For example, the, the angle of the drop. So the first drop will be very sharp, like 90 degrees, right? And then the second drop will be a little bit."

"So, kind of momentum, as you said, you're seeing the momentum shift from aggressive to slowly plateau."

"Yeah."

"Okay. And how important for you, because I'm comparing it to myself, and obviously your, your colleague, uh, Soul, that we just spoke to, and he's trading forex, and in the forex market, you don't have access to the volume, or you don't have the order flow, so we are relying only on price action, and then maybe indicators or other things that some people may use."

"Whereas you have price action plus the, the volume that you can see. How much of an advantage was it to utilize volume?"

"Yeah, it's a huge advantage. I mean, the volume is a key element when it comes to trading, in my opinion. And I don't know how you do it on forex."

"Yeah, I, I wish I had it, cuz the more I get to know, uh, the more I'm always thinking, should I transition? Or at least in my investments, I'm, I'm using it, cuz I'm investing a lot in the stock market. Um, but then you have your investment side, and you also have your trading side, which now, later on in your life, where you're, you're busier with other projects. You are still involved in the markets, but to a different capacity, where you are now longer term holding, or your average trade was 18 minutes, now it's, you know, long-term investment."

"Yeah."

"Has your strategy stayed the same in terms of the entry criteria, or is it a different approach when you invest?"

"So, I'm still trading until this day, just, um, an hourly chart instead of a one-minute chart, for example."

"Um, so, and I'm holding for like, three days, four days, that's, uh, in most cases. Okay."

"Uh, but for investing, obviously, I don't care about the chart in most cases. Uh, you just take a demand area and, and a bias. Okay."

"Exactly. Yeah."

"Ah, interesting. And, uh, when it comes to the volume analysis, now, something I'm jealous about. But let's, let's go into how exactly you utilize it for people that are looking to transition towards the stock market, or people that are trading the stock market."

"How do you utilize volume in a correct way?"

"Yeah. So again, if you're looking for, generally speaking, the, are you familiar with Charles Dow?"

"Yes."

"Okay. So the theory, uh, would say in one, I think the third element will say something about the volume should be, or the fourth, the volume should, uh, increase while the price is increasing, right?"

"And that's the basic concept. And in most cases, a lot of the guys would say, okay, I'm not seeing an increase, so it's probably not that, or, or get that a bit confused or mixed. And the idea is to look for, um, different bad signals or divergency. Yeah, exactly."

"So price is going up, but volume is going down."

"Yeah. For."

"What does this indicate? It means lack of, uh, participation."

"Yeah. Exactly. So price is going up. Okay. So I need to see higher volumes as well. So buyers should put their money when, you know, where they, uh."

"Where their mouth is. Yeah."

"Exactly. And at the end of the day, if they're not, then it makes sense that the price will actually start to decline. Um, another thing, as I mentioned, the capitulation. In most cases, let's say a breakout, right? You want to see a clear breakout with high volume. In most cases, that's what they'll tell you. But actually, there is a certain amount of volume that if you see it, it's actually, um, represents the opposite direction. So, like a reversal. So you need to see a correlation between price and the volume. And if you see the volume increases through, um, too dramatically comparing to the candle that just broke the breakout, the the resistant, then something is off. They're playing with you. Um, you know, bull flags, for example, patterns, if you will see volume increase volume during the consolidation, then something is off. They are trying to manipulate. They are trying to build, um, a pattern that will tell you, okay, it should pop, but in most cases, it will pop and then automatically drop after that."

"Do you believe that the manipulation, or they, as you're saying, there are can be a few parties or one party that is heavily influencing market movements through manipulation, or is this just like a natural battle between buyers and sellers, and sometimes it doesn't make sense, but eventually when you get the movements, and then one side wins, then the sellers take over, and the market goes bearish? Meaning, you say, is it a manipulated market, or is it just the laws of the market that you'll have this battle?"

"Uh, if you ask me, it's manipulated. But, uh, at the end of the day, if you, if you go to the, to the basic of it, you have buyers, you have sellers, right? And in order for me, as a buyer, in order for me to buy a billion shares, I need someone from the other side to sell me a billion shares, right? The, the way that I can create the, the way that I can affect you to sell me that billion shares is through, um, you know, manipulation. I need to tell you that the market is going to crash. I need to tell you that the world, the world is about to collapse, right? I need to tell you those kind of elements that the big analyst on JP Morgan telling you that you got to sell your stocks, and once you see that headline, you will probably call your broker or your bank and tell him, sell those stocks, right? And now I can buy it from you at a cheaper price. I saw it that, you know, the subprime crisis at 208. Um, they, I used, I lived in the States back then, and they shouted during the news that the market is about to collapse, and it wasn't at the beginning, right? It was at the end, like around, um, I don't know, October or November of '08. So we're, we, we were like down at around 70, $80, something around those lines. So on the Spy. So they told you to sell."

"And when they tell you to sell, you buy, you sell, and they buy, right? It's like many, many times."

"Buy the rumor, sell the news. But this, this mentality of like, they come on to the news channels and they'll say XY Z, but behind they're doing the opposite. This is something that is very well documented. We've seen around, but I also thought it was old practice. Would you say that's something still happening?"

"100%. Every single day that you're trading, you will have it. If not specifically in the news, you will have it in the algos that will show you a pattern of of a bull flag, but actually it's for, they're trying to trap you and will move the price down, or they show you that the price is declining, and you think that's it. I got to sell. You will sell it, and they will buy the dip. So this is literally every single day, and I, as you said, I documented myself many, many times that it's happened before."

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"There's many places retail traders or maybe even certain institutions would get involved with a very obvious one would be like a key level, like a round number or a previous resistance or support level. But then you also have patterns like head and shoulder, Fibonacci. When you, when you look at these list of very common places people trade."

"Have you found certain ones to be more manipulated or easy targets to say, 'Okay, here is going to be a reversal because this is too obvious?'"

"Yeah, I mean, first of all, the, the head and shoulder, you mentioned, right? That's a classic one. Everyone, every single trader on earth knows what is a head and shoulder pattern. So, it's much easier to manipulate that because if you see it, and thousands of millions of traders see the same thing, and you believe that it's going."

To drop, then it's easier for me as a big in institutional or or a market maker for that specific stock to start buying that drop, right? So, all I got to do is just activate the sales because everyone is uh shorting the neckline, right, of a head and shoulder. And then once it drop I can buy everything and the price will uh move up.

2016 that was exactly the case in the spy, the ETF for the S&P 500. JP Morgan launched um um letter like a newsletter to all of the clients and told them that's the time you need to sell the shares. The head and shoulder drop on the weekly drop broke the neckline. Smart money bought the the dip and basically the market went up.

Ever since, with um the forex market, uh comparing it to the stock market. Now in the forex side, majority of retail participants, they're going to be through prop firms, which is usually a demo simulator environment, or with brokers, which is often a b-book uh b-book environment. So therefore, the retail stop-losses and this retail head and shoulder pattern might not be the obvious liquidity target because retail traders' liquidity doesn't exist in the real markets. Yeah.

In the stock market, is that difference because you don't have so many B-book environments? There's no B-book. Everyone is a booking. There are some maybe, but most cases it's a book. So, so therefore, you would say the stock market seems to be more easily manipulated because there's clear targets of retail liquidity. Yeah. And you know, when you send in your orders through the broker and uh through the ECN and it goes to the market, there are so many places to that a third party can come and see the the action right before it goes to the market. Ah, before it's executed. Before it's even executed. We're talking about milliseconds, but as long as I got the information, I can react upon it. So, yeah.

Oh, very interesting. And how important for you is looking at the fundamentals of a stock in terms of the earnings, news releases, and these kind of factors? Are you more price action and volume, or would you look at these fundamentals too? Yeah. So, when it comes to trading, especially on the intraday level, it would be mostly uh technical, but there is one uh particular point you gotta or topic you got to put your mind into, which is the catalyst for for that stock for that day. Right? If a stock is gapping up by 10%, there is something going on behind the scene, right? Earnings or any type of um, you know, uh CEO layoff, um, whatever it is, a new product. At the end of the day, once you understand what type of news it is, you can understand if there should be an extension of the move after the 10% gap or it should decline. So, for example, a new product can push the price just a little bit higher, right? But if uh Bank of America is targeting, you know, a big U analyst from Bank of America is saying that the price should be 20% more, then it makes sense that a lot of the buyers will start buying and pushing toward that 20% more. So, you got to understand the nuances of the catalyst that moves the stock.

Between because you've had a bird's-eye view in the industry with your collaboration with Fiverr or involvement in Fiverr. Um, you've seen the behavior of forex and futures traders and and their strategies, their psychology. Have you noticed any difference between them and a stock trader? I mean, a chart is a chart, right? Um, and the psychology behind it is the same as well. But there are nuances between the markets because like you said, the forex market is rangy. So there will be um, a lot of reversals, um, and less trendy trend following like pullbacks and trend following. So on those levels, and also the the forex guys are are more focusing on, you know, those 28 pairs or eight pairs, right, the majors. But when it comes to trading stocks, you have like 12,000 symbols that you can trade with. So every day is a new day, unless you you're focusing on few big names like Tesla, Nvidia, Amazon, those, uh, which is great as well. But in most cases, if you're um trading stocks in play, every day is a new day for you. And that's also exciting.

The the reason I asked that question is because obviously in the forex side, it's all about prop firms. Everyone knows props, talks about props, uses props, and even those with the capital to deposit in a broker, they do think, well, I can now deposit this 10k, or I could buy challenges and have access to a million in funding. That's not my money, and why not? So it's become the new norm. But I don't think the stock world has caught up to this. Uh, which is why I wanted to understand what is the difference here and why is it not so commonplace. Yeah, the the forex and the future industries are are huge in the prop, and like you said, it's a no-brainer. I mean, if you can buy a challenge for $50, trade with much more capital than you could ever bring to the table and not risking your own money. Pass the evaluation after even 10 attempts, right? $500 that you spend there, and you're trading with 10K, it makes sense, simply as that. Um, and this is why we have Trade Pool for stock traders. And the only thing that is different that I guess the time, right? Because um, forex and futures uh industries for the prop have been around for a long time. Uh, stocks is just starting to uh, to grow. And I'm guessing within six months up to a year, we will have more guys coming into this uh area.

As you are maybe one of the only, or if not the only stock option for prop firms. You you're coming up to your three-year anniversary, and in this time you've probably had enough data to understand the industry, and you've obviously seen the the vast data of uh the Fivers, which is a top prop firm. Just comparing it, are you are you starting to see differences in behavior, or because generally when I think of a stock trader, typically they are they are a bit older, they are probably a wealthier person because they deposit amount to invest. It's not necessarily a highly leveraged speculative CFD. It's a, you buy with your real capital. So usually a more mature trader, usually an older trader, usually a more uh invested because they're putting larger amounts, and maybe that has certain behavior differences. Are you noticing any of that in the prop side, or are the stock prop traders in new pockets of traders? Yeah. So the prop traders that we have are actually young guys, join in from their 20s till 35, that that area, and they all, um, most of them in the US, because we're giving a huge solution in that case. Um, in the US, you need to have at least 25K in order to day trade. It's the PDT rule, it's called. So a lot of the guys just hooked by that and and they're saying, like I just said, you know, it doesn't make sense for me to bring 25K from home, uh, when I can put $100 and get the same amount, right? So it's just a matter of understanding that there is a solution like that. Um, a really shift uh coming from the broker industry. We had the broker industry, we had the free no commission that um brought a few years ago, and now we were basically the next step in that evolution.

When it comes to the CFD side of of Forex specifically, because generally it's a ranging market, and predominantly people are just day trading, scalping, and even the swing traders, they're only holding for one week. So you don't really have these people that are position trading, holding for months. And generally, people are not incentivized to do this because the market is up and down every day. There there is sideways price action. There's short-term trends, and there's a lot of volatility and movement. But when I compare that to the crypto market, or I compare that to the equities market, generally they are more, they are more trending markets. And specifically the big ones, Bitcoin, Ethereum, or Apple, Amazon, so forth. Generally, if buying the dip is a good long-term strategy, because, you know, these are are in companies and industries that are going bullish, and if you wait five years, you won't be in a loss. Real estate, especially the indexes, uh, just the S&P for example.

How do you view someone coming in utilizing prop firm capital $100,000 and then just buying the S&P and holding it for months, and therefore using the prop firm, which is designed for day trading capital, as an investment vehicle to buy Bitcoin or to buy um the S&P? Because that's a low risk for the trader. It's like, okay, I might not get the most sexy returns of 100%. But I'll probably get 10% by the end of the year. I'll buy that prop firm account. It cost me $500. 10% is 10K. The math is here for me. How do you view this idea? First of all, everyone are welcome, right? So, we do have day traders. We have a swing plan that you can hold overnight, or day trading when literally you will liquidate at the end of the day. Um, for investors, we still don't have a specific plan, but technically on the swing plan, you can hold your position three months until the the next earnings, basically, and then we will liquidate your position. Um, we will probably in the future also uh launch a plan for investors, and we would be more than happy for guys to hold their position for a year, two years, five years.

Definitely. I spoke to um a CEO of a very large regulated broker here, the largest one in the Middle East. And I spoke to the CEO, and I brought up this topic of, you know, managing risk behind the scenes, because you can a-book, b-book, hybrid. There's there's all these approaches. Yeah. But uh, specifically when it came to crypto, and and at the time I recorded it, it just reached all-time highs. And he said, "Look, it's not realistic for me to a-book these crypto traders because, sorry, it's not it's not logical to b-book them because they are just going to buy Bitcoin, hold it until it's new all-time highs, and I have to pay from my pockets." So, it's better to send it to the to the live market. It's well understood in the Forex prop space. It's usually a B-book, complete B-book, or hybrid B-book, right? Uh, how is it in the in the stock side? So, we're doing also a hybrid. You basically need to understand who you're dealing with. You have guys that are super aggressive, uh, that will go all in and look for that home run, and in most cases, it won't work. Or you have the consistency guys, where where you see that they're not putting a lot of shares. They're not use the full capital that they get. They uh investigate beforehand, and you know, hand-picking the the right stock and the the entry and the exit. So, once you realize that, you can start to understand a better if you want to go with them to the market, and it's not just go with the full account. We might take one order, one trade to the market, uh, or even uh double it, and the other trades will uh stay on the book. So, we're playing with it. Uh, we have a risk management, a nice uh chunk of uh department there that uh should do the work, basically. It's not an easy task. Yeah. Yeah. This side is like the the gold mine of the prop space is like whoever can best crack this data will have will have the longevity and edge, and I think every prop is putting resource towards it.

Coming coming back to the trading team that you had when you're managing the real prop traders. First of all, if you can describe to me now the difference between the online prop model that we are familiar with versus the traditional real capital prop. What are the differences here? Yeah, you know, first of all, when you're sitting in an office, it it's a different atmosphere, right? Different energy. You got 70 guys. Some of them want to jump from the building. The the other guys are super excited and happy about what they did. So, it's a it's an amazing energy any way you either way you look at it. Uh, it's fun, and and you feel the the guys around you. Uh, you can talk to the guys and and you can brainstorm and and get more out of out of your trades because like I said before, you can only think with your mind and your opinion. But if you have someone sitting next to you and telling you, but did you watch this? Make sure you watch this, and so on, then uh, it just give you more edge and pushing you. Um, so that's definitely the benefits of an office. On the other hand, of course, when when you go online, you can trade from anywhere in the world, and we basically bringing accessibility to everyone. It's not just guys that literally here.

And can come to the office. So, when I compare my own trading, day trading, which is lower time frame, M1, intra-session, average hold time is couple of hours max. Um, this is very manual trading. This is a lot of monitoring, decision-making, and active, I want to call it. And I have my key windows that I trade. So I'm not watching 24 hours, and I have my chosen uh Euro USD GBP USD. So I'm not looking at 50 things. But when I compare this, it is a job. It's a responsibility, and it's something you have give mental focus to. When I compare this to my investing, specifically in the stock market, is basically being a idea of key level confirmation, buy and hold. Yeah. And now if it reaches my targets, uh, in in a week, in five weeks, in six months, I'm very able to detach myself from it because it's not my main thing. Number one. Uh, and number two, because it's not like a highly leveraged thing, I'm not hyperfocused on each movement. And then one day I'll check my phone. I was like, "Oh, the market went bullish today. Nice pop. This is great." But if I took that same swing mentality and hands-off and approach and put it into my day trading, I don't think I'd be able to be so free because I would be, I'd still even if it's like, "Okay, this is a swing trade, large stop loss, give it time." I would still watch it every day. Everything when I wake up, when I go to bed, I'll check it. What is the difference? Why is there this difference between same person, same psychology, but day trading brings this side out of me, and investing brings this more relaxed side out of me? What would you say? This is the excitement, you know. It's just a matter of looking at the chart and just analyze it as as you said, to make the decision in real time. The the excitement will get into your head and will hook you into that screen or the phone, whatever, in order to see that you you want to get that confirmation from the market, right? You want to see the results much more uh faster. So, so that's the main thing. And of course, when you're doing day trading, in most cases, as you mentioned, on your investment, you're taking it slowly and you're not going all in, but in most cases in day trading, you're risking a little bit more, and you're allowing yourself more because the stops. Exactly. The leveraging. So, so those elements.

Do do you think therefore in a leveraged environment, in a in a riskier environment, that day trading is that taking that same mentality and trying to be a swing trader is harder? Because in the end, you have your investment mindset, you have your investing, but then in the end, your chosen approach was M1 lower time frame scalps, um, even though you had the skill to be a swing trader, why did you choose to be a scalper? I mean, for me, the excitement as well. As in that's something you wanted. Yeah, yeah, 100%. Interesting. I mean, again, when you're playing Counter-Strike, and you need to find your next best shooting point, and it's the same thing. I I'm still looking at the chart like bad guys and good guys, right? Like fighting each other, and how to how to find the the right spot to to shoot that person or whatever. So, so it's really about the just analyzing in real time.

And on the training floor amongst your team, the few star players that you probably had, those few exceptions that that would always perform or would always be calm or would always pull out good returns. What did you see in them that was different that led them to have that success? You definitely said it, calmer. Definitely, if you if you come with a calmer background, I guess, or or just your personality is more introverted, right? Then it's easier for you to uh to deal with unique situations because we will all react in some degree to, you know, you bought the dip, but it's eventually continued against you, right? So we will all uh react to those elements. But if you're more of an introverted, if you're more of a relaxed person in the first place, it will be much easier for you to to handle the situation. So, this is definitely one of the things. And and you know, just um the fact that you are a hard worker, because there were guys that, you know, used to stay all night at the end of the session, continue to journal in, continue to craft their their strategies and understand what they want to do for tomorrow. And there were guys that once they hit their daily loss, um, were out for the day. So, it's a it's a different type of uh person.

When you compare the behaviors and the psychologies and everything you saw in the real prop firm, in person, with the energy of the room and the team mentality and the coaches and everything, all the resources you had there, and then you see the result of people, and then you compare it to the online prop firm now, and they are trading in isolation. They're learning online. They may be learning alone, figuring it out. It is a completely different world, and even though the capital might be the same, because in props, you have the leverage, now you have found a similar success, or is it completely different in the online space? It's a different beast, no doubt. I mean, um, the guys online today, a lot of them are not not necessarily looking for the classic trading, but actually, and you talked about it with Saul, uh, about evaluation, risk-reward on evaluation, and payout and trying to hit a home run. A lot of them, and in the office, if if I had one guy like this, I would kick him out immediately. But in our case, when when you have thousands of traders every day trading, some of them will try to to eat that trophy and just uh go all in. Uh, some of them will take it serious and and start to work and craft their strategies like the guys in the office. But uh, yeah, you will have a bunch of a mix between those. Give me the Lamborghini tomorrow, I want it. Or, you know what, I know that I need to invest here and take my time in order to uh succeed. So.

And the guys on the online space, which is going to be most of the people watching, what are they doing? The ones that are making good payouts, what are they doing? What is their behavior that you see? Right. So, so first of all, we saw that uh once a trader has barriers, not barriers, sorry, boundaries on his risk side, so limitation on the risk, he will be more successful, or she will be more successful, right? The more the more boundaries you give, the better the trader will be. So, for example, we have a daily loss, a daily pause, sorry. So if you reach that, you're done for the day, right? Let's say $700. Most of our funded traders, and I'm interviewing all of them, most of our funded traders will say that this tiny key saved them and made them profitable. Right? Just just the fact that we're stopping you. You don't need to take a breather after uh after two losing uh trades, right? Like before we talked about, I'm stopping you. I'm telling you, you're done for the day. Forget it. Come back tomorrow. Once I'm doing that, you're not blowing your account. You know that you need to relax and take that moment to yourself. So that uh that one also, if we will uh limit the number of shares you can buy, right? There are guys that buying 10,000 shares, 20,000 shares, and we say, relax. Start slowly with 3,000 shares. See how you can uh progress, and he actually making progress, right? Because we limit the the risk element. Okay. So, so that's definitely one. And of course, the classic, they scaling into the position. They looking for the A+ setup. They're not trying the B's or the C's. They're actually waiting for the A+ setup, patiently doing two or three uh trades a day. There are some exceptional traders that will will execute like 50 trades a day or 100 trades a day. We have great guys like this, Jordan, for example. Um, but it's very unique. One in most cases, they will do like three trades. But even two, three trades a day seems quite quite active, quite aggressive. No, that's um that's a solid one. I mean, oh yeah, I mean, at least in the in the forex side. 12,000 stocks. 12,000. Yeah, true. There's opportunities all over. For me, I would be shocked if I took 10 trades in a week. I'll be like, what? I've I've been too busy here. But I'm also looking at only two things. So, it's completely different.

Uh, what about average trade duration? Have you found that the more successful traders are holding for shorter or longer? Any pattern there? Yeah, so in this case, they actually most of our traders are day traders. Their average time will be on the successful one will be up to 10 minutes. So, yeah, very short term, um, selling the top, buying the dip. A lot of them are shorting penny stocks. So, so they're basically reaction and reaction scalps. You find a moment in the day of manipulation, high volatility, and you're in and out 10 minutes, right?

Okay. And and have you found, because this is something you were doing too, actually. Have you found certain things that would increase your probability to know where a reaction is going to be? Is it just key levels, or is it this volume price analysis? The everything together. I mean, you will see, for example, on the penny stocks, it's uh much easier to do. I actually took a challenge on myself to trade penny stocks. I never done that. So trade penny stocks and shorting them. Right. Uh, so, only shorting. Only shorting, because a lot of our guys are shorting penny stocks. They're waiting for the pump. It reached a major level, looking for the volume, some uh price action, and shorting the top. So, a lot of the guys are doing that, and they're doing it pretty uh successfully. And and there are also nuances there. You need to understand if because when when a stock like a penny stock is popping, it could easily go from 200% to 500 and a,000%, right? In in a matter of of minutes. Yeah. So that that's how crazy the stock market is, in a good way. Uh, so, I mean, that's the same as meme coins at this point. Exactly, similar to that. So you need to understand if, you know, you see the first pop and you say to yourself, okay, is it done for the day? It's going to drop, or there's another leg to the upside, and so on. And the key, the technical key levels, and also the catalyst. What why does it pumping up right there? Is something really about the the asset, the the company, or we actually just seen a classic pump and it will immediately uh drop? So those elements will give you a little bit nuances in order to understand if that's the top or not. A lot of them are using a short um um like a tight stop, right? They will enter. If it's popping up a little bit more, they're they are done, and they will try a few times until they get it.

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And usually the most successful, what kind of risk-reward and win rate profile do they have? So it varies, of course. Um, you got the guys that have high success rate, a little bit lower uh risk-reward, like a one to one, one to 1.2, 2.2. Um, and you have the guys that actually using more of a risk-reward type, but lower um, like 30% success rate. Okay. Yeah. And when you were trading in the professional prop um, what kind of successful traders win rates and risk reward, what did that look like? So, it's also pretty much the same on that level, but um, the idea is also on the on the personality level, right? You could be, for example, for me, I'm a high success rate, uh, lower a little bit lower risk-reward, although my risk-reward is fairly good, but but I'm aiming for better success rate. Okay. Um, but you will see guys that doing 30, even 25% success rate and high risk-reward. Super high risk. Yes. To be honest, if I'm to compare, my personality is not like yours. My preference is I'm happy to have a 50, 40% win rate because I know I can increase my trade frequency. I can take more trades. And I know my risk-reward will support me, and therefore I'm in the market a lot, which is my personality. I don't like sitting around watching and doing nothing. So, I will manually lower my win rates, use my risk-reward as my support, and increase my trade frequency, which in the effect increases my rate of return. But I think other personalities, no, I need 80% win rate. I need to take it easy. It's the personality types.

So in that case, what I'm doing in most cases, it's it basically is scaling into the position, and then I'm allowing myself the flexibility that the the stock can go against me. For example, if I'm buying the dip, I'm not going all in, right? I'm buying a chunk, like 20% of the the total risk that I'm willing to take. If it's dropping down a little bit, I'm averaging my position and adding more to the position. Now, I got to say this, because if the guys are listening right now and they hear me saying averaging on a losing trade, in most YouTubers will tell you that it's not something that you need to do. But as long as you within your risk parameters, you're willing to risk, let's say $100 for a trade, right? You entered and risking $20. Now, it's dropping down. You add in another risk of $20. That's totally fine, right? You are losing, but you're within the $100 that you're willing to lose. So, I'm basically buying a whole lot of shares across the accumulation, basically. And even if it's dropping against me, I can add more because I'm staying within the risk dollar that I'm willing to take on that trade. But on the flip side, you will have certain entries where you only got a small part of your total risk, and therefore you caught the move, but you didn't get enough profit because you didn't get all your entries in.

Is this a disadvantage that you're okay with? Yes. On on two levels. One, in most cases, when I start my trade, like the 20%, I don't care about the execution. So, I'm just throwing the number, throwing the the order, just to be in that trade, just to fill that trade, right? Uh, to be committed to that trade. So, I don't really care if it will go against me. And in most cases, it won't go to my favor immediately because I'm entering uh earlier than than I should, right? And second, I can al also add when it when the price is going to my favor. Let's say it bounced, it's pulling back, like a retest, and then I'm adding more to the position. So I can always um, you know, just add to my favor as well.

So in that case, very interesting, the idea that you're holding a trade for minutes, 10 minutes, 20 minutes, an hour, um, brings me the thought of how do you use bringing your stop loss to break even? How do you use this as a tool to protect yourself? Because you're looking for reactions, session reactions, and if you see manipulation, divergence in volume, and then you get in, and then you don't get the reaction. This is now the trade is not going in your favor. Will you quickly break even, or do you give the trade space to play? I'm not using stop losses at all. So, I didn't know that. Okay. This is a statement for that. So, I'm not using stop losses. Obviously, not a hard stop loss in the system. Obviously mental stop-loss. I know what I'm willing to lose on that trade. And from here, it's about managing the trade, right? The most important thing, at least in my eyes, is managing the trade. So, if I'm executing the trade um in a wrong place, so-called, it doesn't really matter as long as I'm playing it the right way when it's moved to against me or to my favor. Um, so in that case, I won't go into break even. I don't care about the break-even thing. I'm either losing that trade or making money on that trade. Okay. It could be less losing less on that trade. Let's say instead of $100, I'm losing it a bit. 80. Okay. But um, but basically I'm not breaking even. I'm giving it the time because I'm not really responsible of moving the trade, right? And it's not me that moving the stock. So I'm just playing with.

When you have let's say the mental stop versus a actual order of a stop. No. Um, let's say you're willing to lose $100 over 30 points, and then price comes to your level and hits your stop loss. Perfect. You lost exactly $100. In the other side, you might have a scenario where price comes slowly and consolidates around your stop loss, and you're like, "Okay, it's not looking good." You lose $101. No problem. But then you'll have another time where price just drops, and instead of losing 100, you lose 120, or you know, you can lose a lot more than you expected because you're monitoring a bit of delay, a bit of decision-making, and you end up losing more than you should have if you had a hard stop. You you're obviously aware of this, but what is the reason you still choose this option even though there is this problem at times? Cuz first of all, it's a rare situation when you will see a major drop against you. You know that could go against you, and like you said, I would lose so-called 105, 110, right? Uh, but at the end of the day, it's better, at least for me, it's better to give the space for that trade to work and actually managing it, comparing to the fact that I'm I need to close that um, no matter what, on 100 because it might drop to 105, and I'm okay with 105 as well, and then it will bounce, comes back.

So, how do you stop, let's say, the voices in your head, psychology coming and saying, "Okay, I'm at minus 110, but but it's looking good, minus 120. No, it still has these things. I can still hold it." And next thing you know, you're just lying to yourself, and you allow this 100 to become 300. Uh, but then when you look back at the next day, you're like, "No, no, no. That's I made things up in my head." Because whenever you're you have conviction, you will tend the brain will tend to see only things that that is in its favor, and you will very easily ignore the problems, and and then you have a bias, and then you're fixated on it. How do you avoid this happening? So, you're taking me back to my uh biggest loss story. Um, there was a time a few years ago, I lost like in three days, 91k. Wow. Okay. Yeah. That that was a big shocker, even for me back then. And this was prop money or your money? Um, my money. Gosh. And it was um, so basically the same as you just mentioned, you know, I used to lose like $10,000. That was fine for me, even 15. But two hours before, two hours into that trade, I was already down 25K. And I kept telling to myself the same thing as you mentioned, you know, "Okay, I can fight fight my way out of it. I will add more to the position." And I will play with it, manage the trade, and everything, uh, around it. And um, and it didn't work eventually. And that was the time when I, I was the head of the traders in that prop. The the capital was mine, but I was at the time trading with the guys, right? So it's not just about me not uh closing that trade. It was also the way that everyone looked at me and say, "What the hell are you doing? You you're teaching us, you're showing us every single day that you need to close the trade, and you're not doing that." So, it was a whole lot of pressure.

How long ago was this? Uh, roughly six, yeah, six, seven years ago. Okay. So, quite a while ago. And since then, I'm sure, as they say, your biggest loss is your biggest lesson. What did you learn from that period? A lot. First of all, about, and after that, I went uh home and just crafted the hell out of my risk management, and uh, everything involving the number of shares I'm adding to the position, the the places I'm adding in, everything involved around that. I had excels, huge Excel sheets, um, you know, that that I played with the the numbers and see how much capital I need in order to buy x amount of shares, u on each tier or each place that I'm adding to the position. Um, and second, you know, I felt at the beginning, I felt kind of u, you know, I can win the market, right? Because before the trade, I knew what I'm doing. I knew what I was doing, and um, it felt good. And all of the sudden, the market slapped me in the face and told me, "Listen, sit be humble. Although you know what you're doing, you need to continue to u play by the rules, right?" So that's uh that's the main key.

What what about because everyone has a losing period, and everyone has this calamity trade. Yours is probably a little bit bigger financially, but I've had my periods too where I just look back and think, what have I done? And and you you just feel hurt. And I think every trader has walked through that moment. But apart from the lessons learned, which you can look back on six years later and smile about it, but in the in the time it was very serious, excuse me. And the the days after that trade is is also a make or break moment because I think you enter a fight or flight uh reaction. Where I've spoken to traders. I had one on the show recently, and he said he was uh he was also working in a prop firm, a real prop firm, and he he just didn't take a trade for three months. And then eventually his manager of the team said, okay, go and risk and make $50, cuz I know you can make $50, just to get the feet back in the water and slowly build the confidence. And and for him, in a fight or flight, he went into flight. He was paralyzed, and that was his emotions. Yeah. In those situations, when I've had it, the days after I'm ready to fight, and then I need to recognize, okay, I'm I'm going in too aggressive. I need to calm down. There's no need to win back that loss in one day. You can take your time. It's going to be a process. But either way, there is there is both sides, fight or flight. What did you experience after this 90K loss in the coming days and weeks, and and how did you manage the recovery? So, first of all, once I uh closed that trade on on the Wednesday, and I remember it being, even the day. So, I closed that trade at 11 Eastern time, and it felt a relief, right? Because finally, I'm not there. That's it. That the trade is done. Doesn't matter what happened. I lost the the money, but I'm I'm done. I'm out of that situation. And then I took two weeks uh to clean my head, go through, as I told you, you know, just um on the technical level side of things, the Excel sheets, obviously went through the charts, see what I did wrong, what I could have improved for for next time. And and I knew, and that was for my advantage, because I already knew what I'm doing. I I started to convince myself again, and and tell myself, you know what you're doing. You you know, you messed up here, but at the end of the day, you know how to trade. So, just get back on the horse, take it slowly, build it again, and you eventually will reach that moment that you moving forward from that loss. So, it's just a matter of um taking a bre, you know, just outside of trading, not touching the keyboard. That was literally the first time I took so much time out of trading. Two weeks, even when I'm flying for vacations, I'm taking a laptop and trading at Wi-Fi is still there. Yeah, me too. Me too.

So, so uh, it's just a matter of taking the time off. And really, even if you're just started to trade like six months, and you're hitting that major loss, it doesn't have to be, by the way, a big um money-wise loss, right? I spoke to a trader. She told me she lost like $300, but it was so massively messing up her mind that she had to take like three months out of that trade, out of trading, in order to get back.

Do you believe because you've obviously worked with a lot of traders in a in a very professional way. Do you believe trading is for everyone? Do you think everybody has the strength, the courage, the the mental capacity to see through the highs and the lows, or is only for certain people that have this more calmer personality? I think for today, everyone can do that, right? Because of the solution that the online industry and the online platforms generally um, it just give you the ability to trade even if you if you even if you're not a super successful trader. And this is also something a myth that a lot of the the YouTubers are will tell you about, right? They will show you the Ferraris, but you don't really need as a trader to reach that level. You don't need to make eight figures, right? Most most of us, like general regular uh human beings, will be very happy to make another $3,000 a month, right? $2,000, $5,000. So, once you realize you can do that through trading, and I believe anyone can do that. It's just a matter of, you know, how much you want to do that and the tools that support your environment. Then you can actually focus in on that and succeed in that, especially in today's market. So,

I did a uh a ChatGPT calculation with my brother, and he's 22, and I told him, if uh, if he was to invest a hundred pounds, because he's in the UK, but $100 per month, sorry, $100 per week from today, every single week until the age of 60. And I told him, guess how much what you're going to be worth? He said, I don't know, like 100k, 200k. I was like, no. And I showed him how 1.6 million. Yeah. The power of just investing in the S&P and putting money every week automatically from your bank account and never looking at it again. Meaning to say, if somebody's coming into trading to get the riches, whatever, if you can now go to a prop firm and you know, aim for like a 30K payout, which so many people have done, and it doesn't need to be tomorrow, it can be over six months, it can be over three years. Take your time. 30K, 50K, this is a substantial amount of money to invest, and giving it time, allowing allowing compounding interest to take care of the rest, you can achieve a lot of your financial goals. The only difference is people want it tomorrow, and not at the age of 60. So then you got to think of other things. But to your point of the trader going from zero to $50 million just from the markets, super super rare or unheard of. So the achievable side is people make a couple hundred,000 from trading. Maybe a million or two. This is where most people achieve. And then what do you do with that money afterwards is what counts.

So, it's it's like Ronaldo or Messi, right? How many players are in that level? Yeah. Two, or maybe, you know, 10, right? But at the end of the day, there are tons of other players that are great tra play players, traders making money, and it's simply as that, you know.

Yeah. As we as we wrap up the episode, because you've got almost two decades of experience, but also now with your prop uh a bird's-eye view on a lot of traders behaviors. Yeah. I want to give you the opportunity just to give some general advice for someone who's in their six year, six month to one year mark, as a lot of the professional traders you would deal with. What advice would you give them from your years of experience? First of all, use a prop firm. That's by number one, and I'm not marketing it. I'm I'm literally 100% believe that you gotta today, you got to work in a prop firm. It doesn't make sense not to do that. Taking your 5K, 10K, 25K to the broker and risk it. It just blows my mind. You know that guys are still doing that. That's the first thing because once you're in that stage of six months of a year, you can learn and short, you know, the the learning curve should be could be much more shorter for you in order to reach that payout, in order to reach that profitability. And and this is basically what we're doing. We we're giving you, you know, you're trading someone else's capital. You have enough capital that worth your time, actually, and you're not spending hours and hours to make $100 a month. And with the right tools that we carry, like the risk management tools, the daily pause that I mentioned, and the rest of the mechanism behind it, you can actually perform much better than you could ever imagine or did on your broker account. And we see that all the time. I got funded guys that making $50,000 payout, but they actually couldn't make a dollar on their broker account. Yep. So,

Michael, you were a stock star today. Thank you very much for flying in and joining us on the show today. Thank you, bro. Boom. Perfect.