Online Trading Blog

  • Weekly Stock Market Insights.
  • Trading Strategies, Products & Info
  • Indicators, Candlesticks & Patterns
  • Be a Subscriber be a Happy Trader
  • Click here to Explore the sitemap.

 

Friday, December 4, 2009

What is Discretionary Trading?

Discretionary trading or decision trading is one of the two popular trading methods; the other is system trading. It is the trading practice where the trader uses his intelligence and knowledge to make trading decisions with respect to the information available at the time. Discretionary traders rely on their ability to find opportunities and execute trades to make profits from the market.

Discretionary traders can also use trading systems for finding opportunities, screening stocks and charts, finding entry points, etc. But usually the key decisions such as position size, target price, stop-loss and exit points are taken manually. Thus decision trading requires good trading knowledge and hopefully some trading experience.
  • The first and foremost thing to note is that discretionary trading puts pressure on the mind. But the trader can use trading system(s) to ease up the process.
  • As decisions are made manually, large-scale trading and trading a variety of markets/instruments/securities in short-term intervals might be difficult.
  • The strategy is better for swing trading, intermediate and long-term trading; but not for short-term trading such as intraday trading.
  • The strategy is good for persons who want to conduct trades with a high degree of control, persons who can spend time for stock screening/trading.
  • Discretionary trading offers more flexibility and adaptability.
  • Human feelings like fear and greed can cause problems in executing successful trades.
  • Decision based trading demands a high degree of discipline, proper timing and attention.

NobleTrading.com Offers Online Stock Trading, Online Options Trading
Online Futures Trading, Online Forex Trading
Worldwide Brokerage Service, Day Trading Brokerage

Privacy Statement | Margin Disclosure | Risk Disclosure | Business Continuity Plan | Site Map | Order routing Disclosure Penson | Blog

The risks involved with online trading can be financially substantial. Online trading system delays or market volatility may adversely affect online trading related services. Not all securities, services or products are available in all countries or U.S. states. Please consider whether online trading is compatible with your financial resources and individual circumstances. Online trading in extended hours entails additional risks such as lower trading liquidity, higher volatility, more rapidly changing prices, wider spreads, and the like. Nothing herein should be deemed as an offer or solicitation of securities trading, products or services in any jurisdiction in which online trading brokerage services are not properly licensed. SIPC insurance does not apply to futures or forex business.

Brokerage Services provided by Lightspeed Trading LLC, Member finra/sipc/nfa
Copyright NobleTrading.com ®, Inc, a division of Lightspeed Financial, Inc, 2011. All rights reserved.