1. 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 in-
depth 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.