Quiz time! Do you have a passion for trading? Are you willing to work hard to accomplish your dreams? Do you want to be financially free and independent? You're probably in the right place if you said yes to all of these questions. But let's dig a little deeper. Answer the following questions as honestly as you can and then see if trading is really for you…
Is Trading The Right Career For You?
Do you consider yourself a risk-taker?
- No, taking risks is not something that interests me.
- Sometimes, depending on the situation and my mood at the time.
- Yes, I like taking risks because my reward will be greater if I win, and I have a good history of winning big when it counts.
If you're the kind of person who feels anxious at the thought of taking a risk, trading may not be for you. While it's possible to get started with as little as $500 and work your way up from there, forex is inherently risky, and the more you have in your account, the more you have to lose. With that said, forex offers a fantastic opportunity for making money on investments, but only if you can tolerate risk and understand how to manage it.
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The most important thing for me when I trade is...?
- Making as much money as possible.
- Learning how the markets work and how to trade so that I can make money in the future.
- That I see whether trading is suitable for me before I invest too much time or money in it.
The best way to approach trading is with caution. There's no reason to rush into anything, especially if you don't have the resources available or aren't sure that trading is suitable for you. Take your time learning the basics and see how things go before investing too much time or money. After all, we all have different goals and expectations when it comes to trading — some people want a second income, others want to call it a career, and some may wish for a hobby; this will affect things like time frames and risk tolerance.
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Do you want to make quick cash?
- Of course - who doesn't?
- Sometimes -I would like to buy some luxuries here and there.
- No, I prefer long-term investments.
Forex requires patience, discipline, and dedication. This is not a get-rich-quick scheme. You won't be making millions in one day or even one year. If your answer was to grow as an investor and make money over time, then forex is for you!
Setting a stop loss is key to limiting the risk in a trade. See our blog on Where to Set Stop Loss - and Why It's Important>>
Can you lose money and keep your cool?
- Not really. It just makes me want to take more risks to recover my losses.
- Sometimes. I try to stick to my trading plan, but I don't always succeed.
- Yes, no problem. I can resist the temptation to overcompensate for losses.
If you are easily bored and like quick-fix solutions, forex trading may not be for you. Trading requires a lot of discipline and patience as well as self-control. You need to maintain a cool head and will not be successful if you allow your emotions to get the better of you.
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How would you describe yourself?
- I tend to react strongly to bad news and often lose my temper.
- I am generally patient, but I can get upset when things don't go my way.
- I am a patient, level-headed person who never gets angry or flustered.
Successful forex traders must be able to maintain a balanced mindset in the face of losses and profits alike. They cannot get carried away by emotion when things are going well, nor can they allow themselves to panic when their trades turn against them. The markets will test your resolve over the trading week.
Read about five traders for career inspiration and motivation>>
Do you like to follow a plan?
- No, because I can only learn when I make mistakes.
- Yes, as long as it doesn't get in the way of my whims and fancies.
- Yes, because I want to increase my chances of success by being consistent.
Understanding the importance of following a plan and seeing it through to the end is one of the key recipes for trading success. Successful traders create trading plans and stick with them—they don't jump around from trade to trade with no plan. If you find yourself making trades on a whim, it could indicate that you're not ready for trading just yet.
Read our guide to how to avoid drawdown on your account>>
What are your goals for the next 5 to 10 years?
- I want to be wealthy enough that money isn't a concern in 10 years, but I don't know if trading is the only way.
- I want to supplement my income and make some extra cash trading on the side.
- I want to be able to trade full-time and be financially secure in five years.
This one is a no-brainer for those who have been trading for a long time, but it might be a more difficult question to answer for those just getting started. The simple fact is that if you aren't 100% committed to trading, it will be hard to make it as a trader. However, that doesn't mean you should quit your job and go all-in on forex trading right away. Many people find that they can trade on the weekends or evenings after their day job and still make good money while keeping their 9-to-5 career secure.
Do you enjoy research and analysis?
- No, I'd instead just get things done.
- Sometimes it's necessary.
- Yes, I'm very analytical.
Trading is a highly technical profession. You'll need to spend a lot of time studying market trends, learning how to read charts, and formulating a personal trading strategy. There are tools online that can make this process easier, but you'll still need to put in the time and effort.
If you answered...
Mainly A: Trading may not be for you at this time. You may want to take a closer look at your career path before committing any further time or money to trading education or courses.
Mainly B: Trading may suit you, but additional education or practice is required before becoming consistently profitable.
Mainly C: You're definitely on the right track! You can become a successful trader with consistent practice and dedication within months.