👉 THE TRUTH ABOUT DISCRETIONARY TRADING ✅

According to statistics, 2/3 of those who try their hand at forex trading or another type of financial product trading ultimately quit up. Scientists have been researching financial industry failure rates for decades and have come to the conclusion that a beginner trader has a 10% probability of success.

Only the most dedicated and persistent people in the market are rewarded with longevity.

Financial markets can give you the opportunity to receive above-average compensation for your work. To help with achieving this goal, a variety of ideologies and tactics are available. Discretionary trading is one of the most intriguing.

What Is Discretionary Trading?

Trading that is exclusively done at the discretion of the trader is referred to as discretionary (intuitive) trading. Technical indicators and fundamental analysis are minor considerations in this case. First and foremost, trading decisions are based on the trader's instinct and feel of the market.

Simply said, systematic trading is based on rigorous rules and algorithms, whereas intuitive trading is based on making judgements (a trading strategy describes in detail the interpretation of technical indicators and indicates how to open and close positions).

Discretionary Trading: Pros And Cons

There are a lot of misconceptions regarding discretionary trading, just like there are in every aspect of financial activities. Because of this, the idea and definition of discretionary trading are frequently misunderstood. Some people think it's enjoyable for beginners but unworthy of true specialists' attention. Others hold the secret to their swift success and wealth.

Only novice traders or experienced pros with a deep understanding of the market may afford discretionary trading.

However, traders who possess sufficient intelligence and common sense will be able to benefit from intuitive trading in the following ways:

Financial gain If statistics are to be believed, discretionary traders do the best (in terms of total performance). After all, an intuitive trader employs their intuition and hits the target right away, as opposed to a conventional trader who rigorously follows the plan, follows invariably lagging indicators, or waits for significant news. In light of this, if the first trader typically obtains 20% of the profit from a trade, the second trader may receive 200% or 2000%. Six out of ten of the top 10 most successful stock market traders would be regarded as practitioners of intuitive trading.

Personal development According to evolutionary psychology, intuitive trading has a significantly greater impact on a person's personal development. After all, it suggests the most logical application of cognitive abilities. In this instance, the trader learns to avoid piling on layers of pointless data while attempting to extract valuable information.

Efficiency. Traders run the danger of missing the ideal opportunity to place an order by obsessively reviewing and double-checking analytical data. In discretionary trading, there is no such issue because the blow is delivered accurately and at the appropriate time.

Relevance. Ordinary traders run the risk of being unable to keep up with the volatility of the market when using pre-made methods based on the interpretation of technical and fundamental analysis.The major advantage of the discretionary trading system is that the trader adapts their trading to the current market conditions in real-time mode. Of course, if their intuition is so developed that they can assess the market soberly while maintaining calmness and discipline so that emotions do not mislead them.

However, as always, there is a downside. There are negative sides to discretionary trading. The main ones are:

Process subjectivity is too great. Unfortunately, the way the brain is wired makes people more likely to believe information that supports their preconceptions. A trader, for instance, will typically notice the information that confirms their goal for the markets to rise first if they are passionate about that outcome. This strategy carries significant risks.

the impact of observation and expectation. The unconscious impact of the expectation process on how the outcome is perceived is another uniqueness. Can show up as making hasty, rash decisions or, on the other hand, as spending too much time thinking things out and skipping out on having fun.

indulgent in one's prejudices Discretionary traders are frequently the victims of cruel tricks by those who fail to understand their own prejudices. Whether one realizes it or not, cognitive biases (and many others) directly influence one's decisions (consciously or unconsciously). Few people have a truly disciplined mind, which is why discretionary trading is a failure for most.

Can A Beginner Reach The Level Of A Good Discretionary Trader?
Of course! There are chances. Although it's a fallacy to think that everyone who wants it will make it. And to be frank, not everyone needs it. Many traders really find it easier to act according to classical schemes and be satisfied with the profit that can be squeezed out of them. You have to realize that intuitive traders who place orders regularly are world-class players, pocketing millions and billions of dollars. They have learned to distinguish real intuitive impulses from vague hints and impulses arising chaotically in the brain and therefore have achieved success.

How exactly did they achieve this? In this case, we are talking about conscious brain training to develop and improve such qualities as:

emotional stability;
patience;
self-confidence;
the ability to feel comfortable in stressful situations.
Only by having developed them to the fullest, one can talk about any success in this type of trading.

It is important to understand: intuition is not some magical characteristic with which fate blesses a person. It is obtained through practice, defeats, successes, new failures, and overcoming them.

There are no easy ways. And if someone is sure of the contrary, it's easier for them to make coffee grounds' divination, since the result will be just in accordance with such beliefs.

What Is The Catch?
One of the worst things a trader can do is rely on intuition without much experience. Intuitive trading is the ultimate in trading, actually elevating it to an art form. Only those traders who have the necessary personal qualities and many years of successful experience can afford to make decisions based solely on intuition. Ordinary traders who do not have enough knowledge and experience are likely to find themselves in a losing position.

The statistics are inexorable - 95% of beginning traders who try to trade intuitively (it seems easier to them than following the movements of candlesticks and meticulously analyzing indicator indicators) tend to lose their deposits on their very first trades.

For this reason, beginners should use reliable approaches, based on price analysis. After all, indicators and technical analysis are the tools that give a more or less reliable basis for building truly working trading strategies.

Simply put, the "intuition" of a beginner is banal guessing, and with such an approach you will not earn much anyway on stock and currency markets.

Summary
The key aspect of discretionary trading is the effectiveness of the trader as a person. Decisions are made solely based on inner feelings, often in opposition to the current market sentiment.

Taking a discretionary approach to trading is not for every trader. Only those who have mastered the standard methods of analysis flawlessly can step on the shaky ground of guesses and assumptions, and most importantly, can feel the psychology and sentiment of other market participants. After all, it is people who ultimately shape the market, and their actions are far from always logical and rational.

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