Chapter 13: Margin, Pip, Lot and Order Type Flashcards

1
Q

True or False

The leverage does not depends on the margin.

A

False

The leverage depends on the margin.

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2
Q

True or False

The lower the margin, the higher the leverage. And the higher the leverage, the higher the profits can be, but also the higher the losses.

A

True

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3
Q

is one of the great advantages of currency trading and enchants investors with high return opportunities with little equity.

A

Leverage

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4
Q

an abbreviation for “percentage in point” or “price interest point”

A

PIP

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5
Q

indicates the price change of a currency pair.

A

PIP

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6
Q

As a rule, the pip is given to the ________ decimal place, with the exception of the Japanese yen, where it is given to the __________ decimal place.

A

fourth; second

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7
Q

What are the different order types?

A
  1. Market Orders
  2. Limit Orders
  3. Stop Orders
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8
Q

are orders that are immediately routed to the market and executed.

A

Market Orders

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9
Q

are executed at the ask price

A

Buy orders

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10
Q

are executed immediately at the current bid price.

A

sell orders

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11
Q

are the means of choice when you want to react quickly, open or close a position.

A

Market orders

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12
Q

can be of different sizes. Generally, the transaction is not executed until certain conditions are met.

A

limit order

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13
Q

are set when you want to buy at a certain price, usually below the current market price. If the market price falls, the ____________ is executed immediately.

A

limit buy order

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14
Q

work in the same way: you hold the order until the price would reach a certain price, then you sell.

A

Limit sell orders

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15
Q

allow you to quickly take advantage of advantageous price changes, but orders may not be executed at all if the price does not move as specified in the _____________.

A

Limit orders

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16
Q

like limit orders, are also usually executed with a delay.

A

Stop orders

17
Q

is executed when the price is above a certain price.

A

stop buy order

18
Q

Similarly, a sell order with a ____________ is executed only when the price falls below a certain mark.

A

stop sell order

19
Q

_______________ are often called stop-loss orders because they are good for limiting losses.

A

Stop orders

20
Q

To calculate the direct leverage use the following formula Leverage

A

= 100 / (Margin in percent)

21
Q

refers to the smallest price change of a price, it is also called a quote jump.

A

tick

22
Q

10 ticks make a pip. If the USD/EUR rate rises from 1.5555 to 1.5557 the pip has increased by ___, the tick has increased by __.

A

2; 20

23
Q

The size of a position in foreign exchange trading is given in ____

A

lots

24
Q

a lot stands for _______ units of the base currency, so a lot of EUR/USD stands for ______ euros.

A

100,000; 100,000

25
Q

Other lot sizes are mini lots with _______ units or micro lots with ________ units of currency.

A

10,000; 1,000

26
Q

Who are you?

A

A RMT, MD, CPA, MBA, Atty, and has 3 certification in belt. (CFMP, CAEA, CATA)