Trade Discretion

Trade discretion depends solely on the decision of the merchants. For example, a discretionary operator can detect a particular pattern of development in a letter and decides to enter a trade on that basis. It would be impossible to systematize their trade because it relies on subjective judgments and “hunches.” Trading mechanism pure mechanical trading involves the development of trade rules covering every situation, from entry to exit and position sizing. The trader is executing a predefined plan.

However, they must take all the trades that the system gives them which can be difficult if the merchant begins to “think” too! Both sets of operators are working hard at different times and in different things. The merchant passes the mechanical time development of a system and not need to think about trade, meanwhile, is limited to the implementation of a plan. The discretionary trader has to be thinking all the time being negotiated and may suffer from “Information overload.”

Which is better? The answer is probably a combination of both approaches. The confidence that the merchant more to market with a proven strategy rather than relying on instinct is much less stressful and gives. However, markets are constantly changing and a negotiating strategy does not always work – that is, the merchants of the turtle. The strategies should always be updated. Many traders use a mechanical system to generate buy and sell signals, but then use discretion, reading the market, to try to obtain better prices from landfill.

All successful traders will use some kind of proven business strategy to begin with, but the level of discretion allowed to vary. A trader with no plan will fail. Tim Wreford runs a website that provides information and resources for traders. Tim also provides the results of which are updated daily on the site.