Trading OnLine Self-Evaluation Test

1. ADX (Average Directional Movement Index) is a technical analysis oscillator (between 0 and 100) and is used to:

find the direction of a trend

measure the strength of the directional movement of a trend

detecting a gap

indicate a weak trend for values < 20 and strong for values >40

2. If you set an order with Stop Loss, Stop Limit or both:

None of the above

you want to limit losses

The position can always be closed when you want as long as the market is open

to close the position you need wait until one of the two levels is reached

3. In the following chart of the closing prices of a financial asset there are also two 20 day moving averages: SMA20 and EMA20. What is the Exponential Moving Average (EMA) chart?

Trading OnLine Self-Evaluation Test - Figure EMA — Trading OnLine Self-Evaluation Test – Figure EMA

the continuous red line

neither of the two previous lines

the line closest to the blue price line

the black dotted line

4. What are Pivot Point?

Indicators to determine possible closing values for the next session

Price values indicating support and resistance levels

Price values indicating only the supports

Price values obtained from the maximum, minimum and closing price in the previous trading period

5. The average true range (ATR) is a technical analysis indicator that measures:

volatility caused by gaps and limit up or down moves

trend strength

asset volatility

price direction

6. What do you mean “an operation had a 20% drawdown”?

the margin fell by 20%

we close with a 20% loss

does not at the end preclude a gain

as a result of that operation the capital has undergone a negative oscillation of 20%

7. Which technical analysis indicators are in the following chart?

Trading OnLine Self-Evaluation Test - Figure INDICATOR — Trading OnLine Self-Evaluation Test – Figure INDICATOR

Bollinger bands

A simple moving average (SMA), Bollinger Upper Band and Bollinger Lower Band

A channel formed by support and resistance

A simple moving average (SMA)

8. Moving Average Convergence Divergence (MACD) is a dynamic indicator that shows the relationship between two moving averages of a security’s price. In particular it is:

the ratio between a 26-period SMA and a 12-period SMA

the ratio between a long-term EMA and a short-term EMA

the difference between a long term EMA and a short term EMA

the difference between a 26-period EMA and a 12-period EMA

9. Using a leverage of 10 to 1 (10:1), I can:

buy a financial asset for an amount greater than the capital held

invest $1,000 with an initial capital of $100

invest $1,000 with an initial capital of $10

buy 10 CFDs

10. RSI is an oscillator between 0 and 100. What does the following chart mean?

Trading OnLine Self-Evaluation Test - Figure RSI — Trading OnLine Self-Evaluation Test – Figure RSI

a horizontal trend line between levels 30 and 70 allows better identification of extremes when there is a strong trend

movements above the horizontal line of 30 are overbought

movements above the horizontal line of 70 are of oversold, those below the line of 30 of overbought

movements above the horizontal line of 70 are of overbought, those below the line of 30 of oversold

11. What data is required to draw a candlestick?

Open and Close prices and Volumes

O,H,L,C i.e. Open, High, Low, Close prices

volumes are sufficient

4 values of the prices of the session

12. In the following chart of the closing prices of a financial asset there are also two 20-day moving averages, one simple and one centered. What is the Centered Moving Average (CMA) chart?

Trading OnLine Self-Evaluation Test - Figure CMA — Trading OnLine Self-Evaluation Test – Figure CMA

the sum of the two lines

the red line continuous

the line that starts on the day 10

the black dotted line

13. What can the horizontal line represent in the chart?

Trading OnLine Self-Evaluation Test - Figure Line — Trading OnLine Self-Evaluation Test – Figure Line

both a support and a resistance

a resistance

the average of the values

the trend line of the chart

14. What is a long position?

the purchase of an asset with the expectation that its value will increase

a strategy that should only be undertaken by experienced traders

a trading strategy that speculates on the decrease in a stock or other securities price

a bullish market view

15. %K is the “slow” stochastic oscillator, D% the “fast” stochastic oscillator. In the following chart, %K is the continuous line and %D the dashed line. Which is correct?

Trading OnLine Self-Evaluation Test - Figure STOCHASTIC — Trading OnLine Self-Evaluation Test – Figure STOCHASTIC

there is no %D chart

%D = %K

%D is delayed compared to %K

%D = 3-period moving average of %K

16. To calculate the simple moving average at twenty days (SMA20), we must:

add the values of the last ten days and multiply the result by ten

assign the same importance to each individual value

add the values of the last twenty days and divide the result by twenty

add the values of the last twenty days and multiply the result by twenty

17. Heikin Ashi chart is:

a stock chart

a monochrome candlestick chart

a histogram of Japanese candles

a candlestick chart in which data is pre-processed

18. Which of the following is a complete stock chart?

Trading OnLine Self-Evaluation Test - Figure Chart A

Trading OnLine Self-Evaluation Test - Figure Chart B

Trading OnLine Self-Evaluation Test - Figure Chart C

Trading OnLine Self-Evaluation Test - Figure Chart D

19. What is a “Head and Shoulders” in technical analysis?

a specific chart formation that predicts a bullish-to-bearish trend reversal

price volatility indicator

a chart pattern that indicates a reversal trend

a pattern that can only present itself at the end of an upward trend

20. Are the leverage and the margin related to each other?

Leverage = 1 /Margin Requirement

Yes, they are inversely proportional

Yes, they are directly proportional

No, they are not

Question 1 of 20

Note: This test was born from an idea of the authors of the book and all the questions present and their evaluation are the result of their personal experience as trainers. As such, this test has the sole and exclusive informal and confidential value and can in no way be taken as a reference as well as having no legal value.

Trading OnLine Self-Evaluation Test

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