5 weeks ago I attended a Black Belt test in Auburn.
Yoshukai Karate testing includes a pre-arranged self-defense demonstration. Two partners attack the testing student who demonstrate in front of the judges his ability to get rid of them.
Over the years I have seen improvement in the level of proficiency students display. However, there are still too often people perform highly impractical moves, techniques that would result in getting their asses seriously kicked - or worse - if they were to use them in the street to actually defend themselves.
Often the problem lies with their instructors who may either not be very knowledgeable on this matter, (Yes, it happens...) or might not be demanding enough of their students when they let them test.
If your instructor lets you believe that you are sufficiently proficient in your art to be able to actually defend yourself, when you actually are not; he is actually failing you, and if your goal in practicing Martial Arts is to be able to defend yourself, you should look somewhere else for better instruction.
However, at the end of the day, no matter how talented your instructor is, it is YOUR responsibility to make sure you can actually defend yourself by using proper techniques. You, and only You can train and make sure you are up to the challenge.
So how do you know ?
There is a very easy way to test your self defense. Once you have decided what move you want to use on which attack, find someone - if at all possible 50 lb heavier than you - who has no idea what you are going to do, and ask them to attack you. As he or she does not know what you intend to do, he or she will not be able to help and you'll see if your move would actually work or not.
If it works, keep it. If it does not work, change it. Your move might be a valid one, in need of some adjustment - timing, distance, angle, to make it work. Figure them out. It might also be totally out of touch with reality, in that case, simply drop it and find something better.
One last thing... Remember that no matter how good you are, there will always be someone better than you. Don't be cocky.
Taido o imashimubeshi
(be prudent in actions...)