Web Trader MT5
Discretionary trading is when a human trader decides all trades, when to enter, when to exit, and how much to risk. It’s not rules-based, it’s judgment-based. The trader looks at the market, takes a position, and acts, using experience, intuition, and a sense of conditions that don’t necessarily fit neatly into a model.
This is in sharp contrast to algorithmic or systematic trading, where a series of rules is programmed to execute automatically without human intervention.
Discretionary traders generally do well in odd or fast-changing circumstances where pattern recognition and adaptation are more important than speed. The shortcoming is consistency – human judgment is also prone to emotion, tiredness, and bias. Example: A macro trader monitors central bank commentary, reviews positioning data, and sees that market sentiment has become highly one-sided in a currency pair.
There would be nothing in a quantitative model that would indicate it, but experience tells them the setup is ripe for a reversal. They create a position to justify that verdict. That’s discretionary trading at its finest.
