Discretionary Trading
Definition
A trading style where you decide each entry, exit and position size by judgment in the moment, reading the chart, the tape and the news, rather than following a fixed written rule for every decision.
Example
“She trades discretionary entries but never lets judgment touch her daily loss limit.”
Detailed Explanation
Discretionary traders may favor certain setups, but whether to take a trade, how big to go and when to get out is decided trade by trade. Good discretion is pattern recognition built from long screen time, and it adapts well to news and unusual days. Its weakness is measurement: when no two trades are decided the same way, results can't show which decisions helped, and judgment tends to bend under stress after losses. Most discretionary day traders still keep fixed rules for risk per trade and the daily loss limit, use a pre-trade checklist, and journal the reason for every decision so that judgment calls that keep working can be turned into written rules.
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