How to analyze oneself without taking risks
You can mock/paper trade initially after getting equipped with the skills to analyse stocks. Paper trading is one way by which a beginner can assess his capabilities and accuracy with forecasting prices. You can take a hypothetical stock position by just writing that on a piece of paper. The person can himself evaluate by observing the results and score his performance.
This way you can avoid risks and the psychological pressure that one goes through due to an adverse position. Taking a real position can not only wipe out completely the portfolio of the trader but also psychologically prevent him from trading further as he would now be scared to bet money in the stock markets due to his previous loss.
You shall be fully equipped to trade better only after having acquired enough knowledge through learning and intuition which does not come easy and fast. This learning could be rendered useless if one does not maintain financial discipline as he will not only lose money in the market, but also be prevented from trading in the future as he is psychologically scared to invest or trade.
Financial discipline is carefully analysing the financial risk taking capacity and taking the right decisions so as to properly balance one's portfolio and not take more risk than one can manage to handle. Not managing this properly can prove to be a disaster for your financial health in the long term. You will find it difficult to manage small expenses because of faulty planning. Market veterans have for long maintained that.
Patrick Abboud
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