Discretionary Trading
Trading where a person decides each trade in context, using judgement and experience rather than a complete set of pre-written rules.
Discretionary trading leaves the final decision to the trader. A discretionary trader may follow a plan, use indicators and size by fixed risk, but whether a setup is taken, and how it is managed, depends on judgement in the moment: how the chart looks, how the session feels, what the news flow suggests.
Its strength is flexibility. A person can weigh context that is hard to define, such as an unusual session or a market reacting oddly to news. Its weakness is measurement. Because the rules are not fully written, the approach cannot be backtested, and results depend on the trader's state on the day. Memory of past trades stands in for complete records, which invites hindsight and confirmation bias.
The opposite is systematic trading, where the same conditions always produce the same decision. Many traders sit in between, using rules to find candidates and judgement to choose among them. In that case, recording every candidate and whether it was taken is the only way to learn whether the judgement adds value.
On the desk
Two traders see the same pullback in an uptrend. One takes it because the chart "looks strong"; the other passes because the last bar "closed weak". Both are using discretion, and neither decision can be tested later without a written definition of strong and weak.