Market dynamics and volatility: How good are you in these situations?
8 quiz questions to evaluate your proficiency skills on market dynamics and volatility.
Given that all conditions are equal, what is the right ascending order of market volatility:
Metals, Stocks, Currency pair
This order is not correct.
Stocks, Currency pairs, Metals
This order of volatility is not correct.
Currency pairs, Metals, Stocks
Stocks show more market volatility compared to metals and currency pairs.
Stocks, Metals, Currency pair
This market volatility order is incorrect.
In what way will you approach a currency pair trade likely to take a negative movement due to breaking economic news?
Sell short and rub palms to the turnout of events
Selling your portfolio short will only give you their value in return as cash. Actual profit will not be realized.
Adjust the "stop loss" and place a supporting "sell on stop loss" order
Placing a sell-on-stop-loss order will only be executed when the stop loss is triggered. This will allow you to maximize the negative price trend.
Open multiple sell orders ahead of the news event
In this situation, multiple sell orders can compound your loss as much as it has the potential to compound interest.
None of the above
This is also a wrong decision to make.
What is the right attitude toward a trade-based rumor about an asset?
Debunk the rumor and wait for official news
Doing away with the rumor kicks you out of possible benefit from the market.
DYOR— do your research
The first point of call when there is a rumor surrounding an underlying asset is to research it and receive clarity.
Follow your trading community decision
Community decisions are sometimes the best line of action in market uncertainty. It could take a bad turn when there are lots of uniform contributions.
Hope that it stays a rumor
Indecision is as consequential as taking the wrong step.
What do you do to ensure you trade safely amid market uncertainty?
Steer clear of impulsive decisions
Impulsive decisions could ruin your trading.
Abundant investment should only come when you see a potential light on the other side of the tunnel.
Increase my lot size
Increasing your lot size equally increases the possibility of losing all your investments.
Doing nothing leaves you isolated from the market bounties.
Which is more important in both day and night trading—market fall?
Risk management should not be undermined as a day trader, as it guides you from several markets.
The uniqueness of trading strategy
There needs to be more than just a unique trading strategy to make up for the vitality of managing your funds the right way.
Similar to having a unique trading strategy, your knowledge of how money works differs from knowing when to stop investing.
Entry and exit strategy
It is fair enough to have a solid entry and exit strategy when day trading. However, risk management is a top priority.
What is the right way to exit a profiting market?
The stop loss strategy is only useful for mitigating compound loss from a single trade.
With a take profit, you will safely walk out of a profiting market with contentment.
Liquidate your portfolio
Portfolio liquidation should be the least existing option in a profiting market.
It is considered not only discontent but also a shortcut to blow up your account when a sudden pride spike occurs.
In an imminent rally-base-rally trend, a trader is expected to take which of the following actions:
Confirm the price trend upon market consolidation
A rally-base-rally trend consolidates the price at the base level and afterward continues with another phase of the rally. Waiting for this consolidation will guide against an unforeseen price reversal.
Maintain "buy" order in the hope that there won't be a price reversal
When trading becomes gambling, then it is not worth the effort.
Scalp as much as possible
Scalping could get interesting.
Trade on a longer timeframe
Longer timeframes are only an extended view of regular market prices. It doesn't add or take out from your decision as a trader.
High demand for oil causes its dollar equivalent to surge in value. As an investor, how would you capitalize on this situation?
Expect the respective authorities to stabilize oil prices
This is not correct and will often take a long time to actualize.
Rub palms at the turnout of events
Waiting for the unfolding of an event is not always professional, especially when a quick response is required.
Invest in the U.S dollar
A surge in oil prices has the potential to make the dollar appreciate in value.
Do what other investors are doing
In a situation where prices respond to another industry market, imitation could be disastrous.
0 out of 8 answers are correct
You’re a growing beginner. Might need to brush a bit. With more practice, you’ll improve and become an experienced trader.
Fair enough! It’s obvious that you at least paid attention to the basic knowledge of trading strategy and management. However, you could do better next time. Spend time practicing
You’re an expert and have mastered this course. Obviously, you have enough experience to respond to complexities and make good trading decisions. We’ll continuously try to help you with a few tips that’ll improve you even better.