4 Traits That Define A Successful Forex Trader

Try as hard you will, brunt force isn't the way to win trade in Forex! Foreign exchange markets demand careful strategizing and a disciplined approach. The rash behavior beginners exhibit doesn't last long, which serves as the reason behind most novices losing their money early on. When you compare an established trader from one that's just starting off, the difference in mindsets will be extremely evident. 

And what'll be more evident is the fact that a successful Forex trader's mindset is what gets him/her to success! There are certain traits that make a trader successful; while employing strong Forex trading strategies is one thing, having a strong mindset is what truly wins the game.

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Here are 4 traits that carry a Forex trader towards success:

1) Discipline: 

There will be unprofitable trends disguised as profitable ones, and it is essential that traders have the discipline to avoid taking trades blindly! In the foreign exchange market, you will often find yourself driven by greed, fear or overconfidence. These negative emotions will lead to overtrading in no time. When you're afraid of losing money, or driven by the need to make more money fast, you tend to overtrade. 

2) Patience: 

A golden trait all successful Forex traders have, patience alone will take you a long way in Forex. Knowledgeable traders are able to tell when the time is right for a profitable exit. Several beginners tend to get hasty and trade without considering the underlying market factors. However, employing patience in trades will prove incredibly helpful. It will help you make decisions based on market situations and avoid a number of hazardous losses. 

3) Resilience: 

To face a bad trade and stand your ground is no easy task! While Forex Trading in South Africa, you will have a lot of your money on the line. The markets can get scarily volatile while currency trading, which is why traders will have to stand their ground against losses, lose a bit, so that they can win better at the end of the day!   

4) Goal-Driven: 

Successful traders are able to see success and remain successful because they are driven by a goal. They know clearly what they want to achieve and are able to draft their approach around it. So always have strong Forex trading strategies guiding your trades and strong goals guiding you! 

Start your career right - on WesternFX's Forex Demo Account! Backed by our expert guidance, you will be able to master Forex trading swiftly. From live-trade brokerage to personal trade training, we will provide you with both technical and non-technical assistance to ensure you learn how to trade currencies best. Reach out to us today to get started!

Forex Trading Spreads - What You Need To Know

Forex spreads hold ample control over how you trade and have a significant weight of their own. To learn the science behind spreads, you need to understand the general architecture of a currency trade. Most Forex trades happen through brokers.

Keep in mind that these aren't exactly middlemen, but facilitators. You have to pay them in spreads - which is the difference between the bid price and the ask price. Some brokers charge both spreads and per-trade commissions, so make sure you're getting brokerage worth the money put in.

How Bid-Ask Spreads Function:

As a Forex trader, you will be paying a specific price while purchasing a currency called the bid price. Similarly, when you sell a currency pair, you will do so for the ask price. The difference between these two rates will add up as the spread which is paid to your Forex broker.

To understand better, assume that you're buying a brand new phone. Once you've paid for it and start using it, you realize that it isn't worth the money and its market value is falling. So you go back to the shop to sell it, but the dealer isn't going to buy it for the same rate, he will pay you less for it. This is called the depreciation cost. In the Forex trading markets, spread work in a similar manner to this example. 

What Do Market Makers Do?

Forex trading isn't like stock exchange that usually happens in a physical space. Currency exchange happens over-the-counter and in a decentralized environment, meaning you can trade from anywhere in the world, and your trades are conducted by specialists known as market makers. Their job is to facilitate trades, find buyers for sellers and vice versa; these market makers charge spreads, and some even charge additional commissions. They only facilitate, you will have to do the other ground work, from devising Forex Trading Strategies to analyzing markets. 

While this market maker's job seems like easy money, it isn't; there's a lot of risk involved. If the specialist accepts a buy order and the currency's value goes up before selling it, he/she has to still remain committed to the trade and find sellers. 

Even when the bid-ask difference is minimal, market makers make ample profits. But since there's an element of risk involved, they hold on to a small portion of every trade which is called the spread. For example, when trading a currency pair A/B, if A is 1.1235 times B in value, it is natural to believe that A will rise against B, which will lead to you buying the A/B pair for asking price. 

This ask price won't be precisely 1.1235, it might be a tad bit more at say, 1.1240, which you will have to pay for the trade. Similarly the sellers won't receive 1.1235, a small difference will be caught and they will get 1.1230. This difference of 0.0010 is the spread.

Learn more about currency exchange - get a stellar Forex Demo in South Africa today! Call WesternFX and work with our arsenal of knowledgeable traders to take to the top. Avail our brokerage now to see the magic happen!