Discretionary Trader

A discretionary trader buys and sells financial instruments — shares, bonds, currencies, commodities or derivatives — using their own judgement about what will happen to prices, rather than following an automated rule-based system. The "discretionary" part means the decision to put on a trade is a human one, informed by economic data, news flow, market positioning and the trader's read of how other participants are behaving. They work for hedge funds, proprietary trading firms ("prop shops", which trade the firm's own money), asset managers, commodity trading houses or bank trading desks, and are judged almost entirely on the profit and loss (P&L) they generate or the quality of execution they deliver.

Approximate graduate salary

Starting salaries are typically around GBP 45,000-70,000 at large banks and prop firms, though this varies widely by firm type, product and location. Bonuses are a very large and very variable part of total pay - they can rival or exceed base salary in a good year and be near zero in a bad one. Smaller firms, commodity houses and non-London employers often start lower; a handful of elite prop firms pay considerably more. Treat any single figure with caution, as pay in this field is unusually dispersed.

What you'd actually do

Arriving well before the market opens to read overnight news, check what moved in Asian or US sessions, and review any positions carried overnight and what has happened to them
Attending a morning meeting where analysts, economists or strategists summarise the day's data releases, central bank speeches and company results, and the desk agrees what it is watching
Watching live price screens and order flow through the session, adjusting positions as data comes out - a surprise inflation print or an unexpected corporate announcement can require reacting within seconds
Sizing and executing trades, either by clicking prices on an electronic platform, sending orders to brokers, or working a large order gradually so it doesn't move the market against you
Monitoring risk - how much the book could lose in a bad scenario, exposure to a single name, currency or sector - and cutting or hedging positions that have breached limits
Writing up P&L at the end of the day, explaining to a desk head or risk team why positions moved, and researching ideas for the next session
On slower days, building or refining spreadsheets and Python scripts that track relationships between instruments, backtest an idea, or flag when something looks mispriced

How graduates get in

Bank sales and trading graduate schemes are the most common structured route. These typically involve rotations around different desks (rates, FX, credit, equities) before you are placed, and application windows open very early - often a year before the job starts, with insight days and spring weeks in first year feeding into them.
Proprietary trading firms and market makers recruit graduates directly, often outside the usual milkround timetable. Their processes lean heavily on numerical and probability tests, mental-arithmetic rounds and trading games rather than competency interviews, and many do not care what you studied.
Hedge funds rarely hire graduates straight into a discretionary trading seat. The usual path is to join as an analyst, research associate or on the execution/trade support side and move across once you've shown judgement - this can take several years and is not guaranteed.
Commodity trading houses and energy firms run graduate schemes that start you in operations, scheduling or risk before any chance of a trading book. This is a genuinely common and well-regarded route into physical commodity trading.
Internships matter enormously. A summer internship on a trading floor is the single most reliable feeder into a graduate trading seat at banks, and converting an internship offer is often easier than applying cold.
Moving across from an adjacent role - middle office, trade support, quantitative research, sell-side sales - happens, but it is harder than it used to be and usually needs a sponsor on the desk who wants you.

What employers ask for

A strong numerate degree is the norm - maths, physics, engineering, economics, computer science, statistics. That said, some firms take any subject if you perform well on their tests; humanities graduates do get in, particularly at prop firms that test raw aptitude.
Grades are screened hard. A 2:1 minimum is standard and a first is common; many employers also filter on A-level results, and strong maths A-level (or further maths) helps. Some firms look at GCSEs too.
Demonstrable interest in markets. This means being able to talk concretely about a trade idea, what you'd risk on it, what would prove you wrong - not just saying you 'follow the FT'. Personal trading, a university investment society, or a market-related dissertation all help.
Numerical aptitude under time pressure. Expect mental arithmetic, probability, expected-value and brainteaser-style questions in interviews; prop firms in particular make this the core of the process.
Coding is increasingly expected even on discretionary desks - usually Python and Excel/VBA, sometimes SQL. You are not being hired as a developer, but being unable to pull and analyse data yourself is a handicap.
Regulatory requirements apply once you're in a client-facing or risk-taking role at an authorised firm. Employers typically require you to pass an appropriate qualification (such as an FCA-recognised exam) and to be approved under the Senior Managers and Certification Regime. Firms pay for and schedule this - it is not something you arrange beforehand.

Skills that matter

Probabilistic thinking

Every trade is a bet with an expected value; you need to think in terms of odds and payoffs rather than being right or wrong on any single position.

Emotional discipline under loss

Cutting a losing position you still believe in, or sitting out when there is no edge, is harder than it sounds and separates traders who survive from those who don't.

Speed and accuracy with numbers in your head

When prices are moving you need to size a trade, work out a hedge ratio or check a quote is fair without opening a spreadsheet.

Data handling in Python and Excel

Testing whether a pattern you think you've spotted actually holds historically is routine, and desks expect you to do it yourself rather than queue for a quant.

Concise verbal communication

You explain a position to a risk manager or shout a price across a desk in a sentence - ambiguity costs money, and long explanations aren't listened to.

Understanding market structure and mechanics

Knowing how an order book works, how settlement and margin function, and where liquidity dries up determines whether a good idea makes money in practice.

Where it leads

Graduate or junior trader / trading assistant - initially supporting senior traders, running risk reports, executing simple orders and learning the products. Structured schemes at banks usually run one to two years before placement, but how quickly you get any independent risk varies enormously and at some firms it is months, at others years.
Trader with your own book or limits - you are given a defined amount of risk you can take and are measured on P&L. Pay starts to become heavily performance-linked at this stage.
Senior trader or desk head - larger limits, responsibility for a product area, and often supervising juniors. At banks this comes with regulatory responsibility for the desk.
Branching point. Common moves are: to a hedge fund or prop firm for a larger share of your P&L; to portfolio management on the buy side; into risk management, treasury or structuring; or setting up on your own. Some traders leave markets entirely for fintech, trading technology or start-ups.
Timelines here vary far more than in professions like law or accountancy. There is no fixed ladder - a trader who performs can be given serious risk quickly, and a trader who doesn't may be moved on regardless of years served.

What people get wrong

“It's gut instinct and shouting on a trading floor.”

Almost all execution is electronic, floors are quieter than films suggest, and 'discretionary' means informed human judgement built on data and research - not intuition. Even discretionary traders spend a lot of time in spreadsheets and code.

“Discretionary trading is the opposite of quantitative work, so you don't need maths.”

The contrast is with systematic or algorithmic trading, where a model executes automatically. Discretionary traders still need strong numeracy, statistics and increasingly programming - the difference is who presses the button, not whether numbers are involved.

“Bank traders take big directional bets with the bank's money.”

Post-crisis regulation has pushed most bank trading towards market making - quoting prices to clients and managing the resulting inventory and risk. Genuine large discretionary risk-taking sits mostly at hedge funds, prop firms and commodity houses.

“You need an economics or finance degree.”

Many traders come from maths, physics, engineering or computer science, and some firms deliberately recruit on aptitude tests regardless of subject. What is far less negotiable is demonstrable numerical ability and a real interest in markets.

“Once you're in, you're set.”

Performance is measured continuously and transparently in P&L. Job security is lower than in most graduate careers, and desks and whole product areas get closed. The upside is real but so is the turnover.

Where this varies

The job differs a great deal by employer type. At an investment bank you are mostly market making - quoting prices to clients and hedging the risk you take on - with tight limits, heavy compliance and a structured graduate scheme. At a proprietary trading firm you trade the firm's own capital, the environment is flatter and more meritocratic, recruitment is aptitude-test driven and you may get risk far sooner. At a hedge fund the horizon is usually longer and the work looks more like research, with fewer trades and deeper analysis. At a commodity trading house the job involves physical cargoes, shipping, storage and logistics as much as price - you may spend as much time on scheduling and counterparty issues as on the screen. Geographically, the roles concentrate heavily in London, with energy and commodities also present in places like Geneva and Houston for those willing to relocate; smaller clusters exist in Edinburgh, Leeds and Manchester, more on the asset management side than pure trading.

General guidance about the role across the UK market, not about any specific employer. Entry routes and requirements vary — always check the individual job advert.