Discretionary trading allows you to control your trades directly. Discretionary traders rely on their intuition and understanding of the current market conditions instead of strict rules.
It does not mean discretionary traders do not use any trading rules or strategies. Rather, they apply and modify these rules depending on the current situation.
This trading system is useful when you need to act quickly. For example, the recent economic recession made consumer discretionary stocks very volatile. Because of this, traders who use standard trading rules and algorithms often miss good opportunities. Discretionary traders make their own decisions based on available information and predictions.
The advantages of the discretionary trading system include high profitability, adaptability, and efficiency. It allows you to analyze and use the current market conditions to maximize profit. You are free to choose what is best suited to your needs.
The disadvantages of discretionary trading lie in its reliance on a trader’s judgment. Emotions can prevent you from thinking clearly and making objective decisions. Moreover, a discretionary trader needs to have some experience in trading, so this system is not beginner-friendly.