Discretionary Trading

From Forexpedia

Discretionary traders are the psychics of the Forex market. These traders rely on their intuition to decide when to enter or exit a market. While other trading methods emphasize the reading of signals based on formulae or patterns, discretionary trading involves using subjective experiences. They are the polar opposite of the mechanical trader.

Because discretionary trading is based on intuitive reaction, it is best suited to those traders who feel comfortable relying on their gut-feelings to tell them when to buy or sell. Many traders can make large profits by jumping on profitable position changes quickly. But there are also disadvantages to using this kind of trading system. Discretionary traders may end up making a great profit with their trades, but without using a formal system, there is no way to backtrack to find out how they succeeded, so there's no way to repeat the process.

Even without having a fool-proof system, discretionary trading can be very profitable, while at the same time offering traders the flexibility and control to jump in and stop a trade that appears to be going downhill or modifying a bid to maximize profit if it appears that a trade value is increasing.