That was a very cool question that a lot of traders look down on. What would have happened, if for instance you opened your real account, fund it without verifying your readiness of what you are about to do?
Are you struggling with the confidence to trade? Or longing for a method to verify your level of impact on trading fx? Then I’ll advise you worry no more.
However, it is very obvious that your confidence will be boosted to a certain level, if you know the status of you readiness, which is a proof-tool of seeing forex as a business and not a game.
Below, I am going to be sharing with you, 4 practical test-tools, to measure your readiness to trade forex.
#1. Check How Active You Make Trading Decisions Without Depending On Others.
The above tip, counts a lot in Fx trading. Your decisions determine whether you make profit or loss in a trade.
Whatever move you make in forex trading is based on your decision, and if such a move has been earning you more pips consistently, then your trading decisions are active but if it had made you to lose more pips consistently, then you have much work to do on that.
However, you don’t really have to feel bad about it, to become a consistent profitable trader is not an instant effort, it’s a gradual process; so don’t feel bad if your trading firmness of conviction has not yielded you profit.
If you want to test, you could start by asking yourself the questions below;
- How consistent have I made profit based on my decisions?
- Whenever I look at both my fundamental and technical analysis, how effective are my conclusions?
- Do I depend on other traders before making my move?
Answering these questions above, will definitely help you build your confidence to a plus-level of understanding how far you have gone in practicing your demo account.
#2. The Effectiveness of Your Interpretation on Fx News.
Every meaning you make when going through forex news is a function of your understanding. In the above tip, you have to carry out this test with all sincerity.
You are not competing with anyone in this business; therefore you have to be careful when checking them out. Testing you effectiveness towards interpreting forex news has been a method ignored by most traders. May be because they don’t believe in them, but the practical fact still reveals that whatever meaning you make from fx-news is very important.
The importance of this interpretation still point towards the direction of making decision. Now, if a trader finds it hard or has been challenged with the skill of making sensible meaning out of news updates, you’ll agree with me that such a trader will have a higher probability of losing money, because, his trade was based on a confused platform.
#3 Verify Your Analysis Source-Is It Based on Instinct?
Yes, one of the practical ways to weigh your readiness to trade is to verify your source of analysis. The question is-what source is your analysis or judgment based on? Is it based on your instinct?
A lot of traders have argued on this issue of instinct? Some believe it’s an analytical tool while others see it as a way to gamble with your money. But the real question is -on what foundation is your analysis built on? Is it built on your instinct? Or is it on thorough analysis of your chart?
But in standard view of analysis, it is very much advisable that a trader does not make his move based on his or her instinct .For instance look at the way trader A analyzed his trade. On this very day he was about to trade, Setting his time interval to 15minutes on a candle stick chart and some indicators like Moving averages (MA), parabolic-Sar etc..
Traders A’s view–According to my chart display, I think it’s a bull market, let me buy. Being sincere, as a disciplined trader, is this the best way to approach or to decide in the forex market?
Looking at the trading life of such a trader, he may have said that based on his previous luck. But one viral-idea swimming In the mind of some traders especially the newbie’s is –thinking of Fx market as luck-business. Such perception has ruined a lot of trading accounts.
Always note the root, where your analysis is coming from.
#4 How Constant Do I Make Profit When Trading?
You have to be very careful when answering this. It has a lot to do with your results. Here, your results are dependent on the effort you have invested in trading.
If you check and see that you are not a consistent earner from the market, don’t let it border you, all you have to do is to work harder; check out what is wrong and make amends.
How does this affect my readiness?
Yeah, your consistency and inconsistency in making profit while trading demo has a lot to do with your level of understanding in trading forex.
If you trading Is consistent, it simply shows that you are ready to invest and make the real money from the Fx-market, but if your results (profit) from trading is inconsistent, then it simply means that such a trader is not ready for the real market.
Why? Because if he tries to invest on the real Fx market (that is opening funding a real account), he will be exposed to a higher percentage of risks than the one who was making profit consistently.
If you want to make it big in the Fx market, then you’ll have to understand when you are ready to trade. Most traders today fail because they never measure their readiness to trade. They are always in a haste to make it once without understanding what it takes.