What Is a Discretionary Account?

A discretionary account is a type of trading account that an individual has with a broker. With this type of account, the broker can make trades on the client's behalf without getting his prior approval for the specific trades.

This type of trading account is also sometimes referred to as a managed trading account. With this particular account, the broker has the freedom to do as she wishes with the client's money.

In many cases, the broker will take a percentage of the winnings from the trades that she places. This gives the broker an incentive to perform well on behalf of the client. If the broker does not win a significant number of trades, she will not be able to make any money.

If you are considering utilizing a discretionary account, you need to be very careful who you sign up with as a broker. You need to make sure that you choose a broker that is very successful in the industry and has a good track record. You want someone that knows how to trade the financial markets so that she will not destroy your account. Putting your account in the hands of someone that does not know what she is doing could be a recipe for disaster.

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