Elementary

Question 1

In a bull market, a ____ level is an area that price has difficulty breaking through to the downside.

Answer 1

Support

Question 2

When price breaks through a resistance level, it could potentially become…

Answer 2

A support level

Question 3

How many tops or bottoms does it take to confirm a trend line?

Answer 3

Three

Question 4

When drawing trend lines, you should…

Answer 4

Never force them to fit the market

Question 5

Describe a market’s behavior when a pair is trading within a channel?

Answer 5

Price trades within two parallel trend lines,

Question 6

A descending channel is characterized by…

Answer 6

Lower highs and lower lows

Question 7

Generally, the ___ of a channel is considered to be a ____ zone.

Answer 7

Bottom, Buy

Question 8

When trading off support and resistance levels, you generally should…

Answer 8

Wait for price to bounce off the support/resistance level as confirmation that it is holding

Question 9

When trading the break of support or resistance levels, the conservative way would be to…

Answer 9

Wait for price to retest the broken support/resistance zone then buy/sell

Question 10

What do you call a candlestick pattern that has long upper and lower shadows and small real bodies?

Answer 10

Spinning Top

Question 11

Who “discovered” the secret technique of candle stick trading?

Answer 11

Steve Nison

Question 12

What would a candlestick with a white body represent?

Answer 12

Price closed above the open

Question 13

What do long black candlesticks indicate?

Answer 13

Sellers were in control

Question 14

What do you call a candlestick pattern that has a long lower shadow, with no upper shadow and price closing at its open price?

Answer 14

Dragonfly Doji

Question 15

What do you call a candlestick pattern that closes significantly below its opening price and has no shadows?

Answer 15

Black Marubozu

Question 16

A ____ is a bullish reversal pattern that forms during a down trend. It is characterized by a long lower shadow and normally has a white body.

Answer 16

Hammer

Question 17

Which of the following is NOT a recognition criteria of a hanging man?

a. A long upper shadow that is about two or three times the length of the real body
b. The real body is at the upper end of the trading range
c. Little or no upper shadow

Answer 17

A long upper shadow that is about two or three times the length of the real body

Question 18

What do you call a two candlestick pattern that indicates a strong down move may be coming?

Answer 18

Bearish engulfing

Question 19

What do you call a two candlestick pattern that signals a reversal to the upside may happen?

Answer 19

Tweezer bottom

Question 20

A ____ candlestick formation is a trend-reversal pattern that is found at the bottom of a downtrend. It has the following characteristics: The first candlestick is characterized by a strong bearish candlestick. The second candlestick should have a smaller body that reaches the midway point of the first candle. Third candlestick’s close should be above the high of the first candlestick

Answer 20

Three inside up

Question 21

A Swing High is a candlestick with…

Answer 21

At least two lower highs on both the left and right of itself

Question 22

Which of the following is not a Fibonacci retracement level?

a. 0.212
b. 0.382
c. 0.618

Answer 22

0.212

Question 23

When the market is on an uptrend, you would ideally…

Answer 23

Go long (or buy) on a retracement at a Fibonacci support level

Question 24

The Fibonacci retracement tool works best when the market is…

Answer 24

Trending

Question 25

Fibonacci levels give you a _____ probability of success, but they _____work.

Answer 25

Higher, Don't always

Question 26

The Fibonacci tool should…

Answer 26

Be used in combination with other tools

Question 27

One of the best ways of using the Fibonacci tool is…

Answer 27

To determine potential support and resistance levels

Question 28

The Fibonacci tool goes well with…

Answer 28

Trend line analysis

Question 29

True or False: You can use the Fibonacci tool to help you find potential entry points.

Answer 29

True

Question 30

If it seems that price is stalling on a Fib level, chances are that other traders…

Answer 30

May have put some orders at this level

Question 31

If a Fib Stick forms right below or right above a Fib level, you can just enter a trade at market price since you now have more confirmation that level could be…

Answer 31

Holding

Question 32

In an uptrend, the general idea is to _____on a _____trade at a Fibonacci Price Extension Level.

Answer 32

Take profits, Long

Question 33

In a downtrend, the general idea is to _____ on a _____ trade at a Fibonacci Price Extension Level.

Answer 33

Take profits, Short

Question 34

True or False: As much as possible, you should rely solely on Fib levels as support and resistance points as the basis for stop loss placement.

Answer 34

False

Question 35

With wider stops, and without reducing your position size, you may incur…

Answer 35

Larger losses

Question 36

What are the two major types of moving averages?

Answer 36

simple and exponential

Question 37

To make a moving average smoother, you should get the average closing prices over…

Answer 37

a longer time period

Question 38

The longer the period you use for the SMAs, the __ it is to react to price movement.

Answer 38

slower

Question 39

True or False: With the use of SMAs, we can tell whether a pair is trending up, trending down, or just ranging.

Answer 39

True

Question 40

One problem with simple moving averages is that they…

Answer 40

are susceptible to spikes

Question 41

EMA stands for…

Answer 41

Exponential Moving Average

Question 42

EMAs give ___ weight to the most recent periods.

Answer 42

more

Question 43

Which type of moving average displays a smooth chart which eliminates most fakeouts?

Answer 43

SMA

Question 44

Which type of moving average is quick-moving and is good at showing recent price swings?

Answer 44

EMA

Question 45

You get a clearer signal of whether the pair is trending up or down if you plot…

Answer 45

two or more moving averages

Question 46

When the pair is in an uptrend, the faster moving average should be…

Answer 46

above the slower moving average

Question 47

When moving averages cross over one another, it could be a sign that…

Answer 47

the trend is about to change soon

Question 48

Crossover systems work best in…

Answer 48

trending markets

Question 49

Moving averages can be described as "dynamic" support and resistance levels because they…

Answer 49

move according to recent price action

Question 50

Plotting different types of moving averages helps you see..

Answer 50

both long-term and short-term movement

Question 51

Bollinger bands can be used to measure the market's ___ in such a way that when the market is "loud" the bands expand and when the market is "quiet," they contract.

Answer 51

volatility

Question 52

The idea behind the Bollinger bounce is that price tends to...

Answer 52

return to the middle of the bands

Question 53

What does MACD stand for?

Answer 53

Moving Average Convergence Divergence

Question 54

What do the two lines of MACD represent?

Answer 54

the moving average of the DIFFERENCE between the price moving averages

Question 55

When a ____ occurs, the fast line starts to move away from the slower line, indicating that a new trend has formed.

Answer 55

crossover

Question 56

What do Parabolic SAR dots indicate?

Answer 56

potential reversals

Question 57

Which of the following is the proper way of trading using the Parabolic SAR?

Answer 57

Sell when Parabolic SAR is above price

Question 58

Parabolic SAR is best used in ____ markets.

Answer 58

Trending

Question 59

What market condition does Stochastic indicate?

Answer 59

overbought and oversold conditions in the market

Question 60

Using Stochastic, traders usually sell when the lines are in which range?

Answer 60

80-100

Question 61

Using Stochastic, traders usually buy when the lines are in which range?

Answer 61

0-20

Question 62

What does RSI stand for?

Answer 62

Relative Strength Index

Question 63

What is the baseline figure for RSI used to confirm trend formations?

Answer 63

50

Question 64

Typically, RSI readings below ___ indicate that the pair is oversold, while RSI readings over __ indicate that it is overbought.

Answer 64

30,70

Question 65

Typically, traders use the ADX (Average Directional Index) to determine what?

Answer 65

the strength of the current trend

Question 66

What levels do ADX Fluctuate between?

Answer 66

ADX readings above 50 signal a strong trend.

Question 67

We illustrated ways that you can use the ADX. Which among the following is NOT one of them? a. ADX can be used to confirm if the pair will continue in its current trend or not. b. ADX can be used to determine when one should close a trade early. c. ADX tells you when a pair is overbought or oversold.

Answer 67

c. ADX tells you when a pair is overbought or oversold

Question 68

What does Ichimoku Kinko Hyo mean?

Answer 68

A glance at a chart in equilibrium

Question 69

As we've said, Ichimoku Kinko Hyo is a 3-in-1 indicator. Which among the following does it NOT measure?

Answer 69

the strength of a current trend

Question 70

If you wanted to look at future price movement using the Ichimoku Kinko Hyo, which line would you look at?

Answer 70

Kijun Sen (blue line)

Question 71

If a trader is using both RSI and MACD in trading, when should he sell?

Answer 71

RSI overbought and the MACD shows a downward crossover

Question 72

True or False: The best thing for everyone to do is to use just one indicator so as to avoid analysis paralysis.

Answer 72

False. It's better to combine indicators so they can filter each other's imperfections.