Activtrades – Discretionary Forex Trading systems
A discretionary Forex trader using Active Trades is one who doesn’t make use of an automated system for their investments. Most experts only advise those with years of experience, and an indepth knowledge of technical analysis, to use discretionary, rather than automated trading. A discretionary Forex trader must be able to use their understanding and experience to make good judgement calls regarding things like when to enter a trade, as well as when to exit. Such traders should also have comprehensive knowledge of the usual chart patterns and indicators, and should be able to recognise a trend even in its infancy.
One of the areas in which discretionary trading takes place most often is in the security selection. Whilst an automated system would allow a trader to try out a number of different financial instruments and decide which one performs best, a discretionary trader will usually choose just one and stick with it. They’ll most likely base their decision on their understanding of the system, and their intuition.
However, even experienced and highly knowledgeable discretionary traders on activ trades must bear certain things in mind when making decisions about buying and selling. The first is that they must have a method in place which will help them to cut losses, should the trade not work in their favour. If they don’t have this method set up, they will soon find themselves having financial issues. Less experienced discretionary traders often skip this step and find that they have to give up trading within the first six months. Automated systems have the benefit of having a stop loss in place which the trader doesn’t even have to think about, but those who practice discretionary trading will have to do this themselves, and as it often feels akin to admitting fault in a trading decision, many traders find themselves too proud to cut their losses and end up losing significant amounts of money. A discretionary trading plan has to also allow the winning trade to provide the most optimal yield. After a losing streak, many traders feel that they should close out as soon as they see that
they have turned a profit. The wiser choice is to allow the winning trade to build up more profits. A trailing stop can be helpful in this instance. And because a winning trade should work out as more than the lost trades, the discretionary trader should also have a plan in place which reviews the risk to reward ratio of every trade they make, so as to ensure that the odds are favourable. To conclude, before a trader considers using this type of trading system on activtrades, they should carefully consider where discretion will need to be exercised in the process, and what kind of impact it might have on their results.