Stocks

Question 1

What is the simplest aspect of market structure in an uptrend?

Answer 1

Higher highs and higher lows.

Question 2

What must occur after a higher high is created in an uptrend?

Answer 2

A higher low must be created.

Question 3

What is an example of sideways action in market structure?

Answer 3

Range or consolidation with equal highs and equal lows.

Question 4

What does a downtrend consist of?

Answer 4

Lower lows and lower highs.

Question 5

True or False: Sideways action generally has a higher win rate for traders.

Answer 5

False.

Question 6

What do most new traders expect to see on a chart?

Answer 6

A simple pattern of higher lows and higher highs.

Question 7

What can confuse new traders when looking at market structure?

Answer 7

The presence of highs and lows that do not clearly indicate a trend.

Question 8

What is multi-timeframe analysis used for in trading?

Answer 8

To reduce noise and understand market trends more accurately.

Question 9

What happens when a trader does not understand market structure?

Answer 9

They may get faked out of trades.

Question 10

What are the key components of market structure that traders should focus on?

Answer 10

Swing highs and swing lows.

Question 11

What is an internal high or low in market structure?

Answer 11

Levels that indicate break of structures but are less significant for trend reversals.

Question 12

Fill in the blank: A stock does not change its trend until the _______ is broken.

Answer 12

[change of character].

Question 13

What is the importance of higher time frames in trading?

Answer 13

They provide a clearer view of market trends.

Question 14

What is the break and retest strategy?

Answer 14

A resistance turned support after a strong breakout.

Question 15

What is displacement in trading?

Answer 15

The move that occurs after a key level breakout.

Question 16

How should traders determine their stop loss in an uptrend?

Answer 16

At the previous pivot level.

Question 17

What should traders look for after a strong break above resistance?

Answer 17

A pullback to the new support level.

Question 18

True or False: Higher time frames hold less emphasis on stock movements.

Answer 18

False.

Question 19

What is a pullback in trading?

Answer 19

A pullback is when the price of an asset retraces from a recent high before continuing in the original direction.

Question 20

What does resistance turning into support mean?

Answer 20

It means that a previous resistance level is now acting as a support level after a strong price breakout.

Question 21

Define displacement in the context of trading.

Answer 21

Displacement is the move that occurs after a key level breakout.

Question 22

What should traders look for during a retest after a breakout?

Answer 22

Traders should look for buyers stepping in at the previous resistance turned support.

Question 23

What is the significance of entering on the right candlesticks?

Answer 23

Entering on the right candlesticks is key for successful trading, as it indicates strong buyer or seller control.

Question 24

What is the most bullish candlestick?

Answer 24

The most bullish candlestick is a full green candle, indicating heavy buying.

Question 25

What does a hammer candlestick indicate?

Answer 25

A hammer candlestick indicates that buyers stepped in after sellers pushed the price down, showing strength in buyers.

Question 26

True or False: Candlestick patterns should be analyzed away from key levels.

Answer 26

False.

Question 27

What is the three-step checklist for profitable trades?

Answer 27

1. Start on the higher time frame to determine the stock's structure. 2. Go to the lower time frame for break and retest setups. 3. Enter with strong price action.

Question 28

What is the first step in analyzing a trade's market structure?

Answer 28

Marking out the swing high and swing low.

Question 29

What does a gap fill indicate in trading?

Answer 29

A gap fill indicates that the stock needs to pull back to fill unfilled orders in the gap.

Question 30

What signifies a strong bullish move on a stock?

Answer 30

Creation of higher lows and a break above previous highs.

Question 31

Fill in the blank: The second most bearish candlestick indicates that sellers are ______.

Answer 31

more in control.

Question 32

What is the purpose of marking the previous day high and low?

Answer 32

To identify where the most liquidity is sitting for the day.

Question 33

What is a retest entry?

Answer 33

A retest entry occurs when the price pulls back to a previous support or resistance level after a breakout.

Question 34

What does a risk-to-reward ratio of 4.8 indicate?

Answer 34

For every $1 risked, the potential reward is $4.80.

Question 35

What strategy was used in the live Tesla trade example?

Answer 35

A break and retest strategy based on market structure.

Question 36

What does it mean if a stock is in an uptrend?

Answer 36

The stock is consistently making higher highs and higher lows.

Question 37

True or False: Consolidation means a strong trend is guaranteed.

Answer 37

False.

Question 38

What is the final profit target in the Tesla trade example?

Answer 38

181.82.

Question 39

What is an impulsive move in trading?

Answer 39

An impulsive move is a strong price movement in one direction.