I'm not sure if you want to manually choose the colours yourself or just set AI to use a specific amount of colours when using
Live Trace, I'm mostly confused by the term
Image Trace, but I'm assuming you mean Live Trace.
To set the amount of colours you will allow Illustrator to use with
Live Trace, either click on the Live Trace button and choose
Tracing Options, or
Object > Live Trace > Tracing Options.
You will see a dialog box like so:
Max Colors option you can choose from 2 to 254 colours for your Live Trace.
If you wish to use one of the preset options for the Live Trace, you can do so first and then go to
Object > Live Trace > Tracing Options to adjust the number of colours used afterwards.
Please leave a comment if this has nothing to do with what you're trying to do.