Technical analysis and strategy: Evaluating your strength


The primary objective of this assessment is to get you accustomed to the fundamentals of technical analysis and several of its trading strategies. This will undoubtedly inform your decision-making process and guide you on the vital steps to take when faced with real-life situations and market fluctuations. Each question is structured to present crucial lessons on technical analysis and strategy.

What stands out as the primary aim of trading with technical analysis?
To help in predicting market movements in the future
Technical analysis is based on historical market data and patterns and doesn't aim to predict future movements.
For identification of patterns and trends in past market data
The primary objective of technical analysis is to spot trends and patterns in historical market data, which can be deployed to help traders make informed trading decisions.
To set an evaluation of the financial health of a company or portfolio
No aspect of technical analysis is directly involved in evaluating financial health, either of a company or personal portfolio.
None of the above
The core responsibility of using technical analysis remains to satisfy the claims of historical market data in making better trading decisions.
Back Next Check
As you observe qualitative technical analysis for a trade, which of the following technical indicators would you commonly use in measuring how strong or weak a market trend is?
Moving Average (MA)
The Moving Average (MA) is a widely used technical indicator that identifies patterns and trends in past market data by calculating the average price over some time.
Relative Strength Index (RSI)
Relative Strength Index (RSI) merely compares the degree of recent gains to losses to know the underlying asset's oversold or overbought conditions.
Bollinger Bands
Bollinger Bands are useful indicators that spot market volatility.
All of the above
The above indicators have their specific role in the different market conditions.
Back Next Check
For what justifiable reason would you insist on using the Moving Averages as part of your technical analysis trading strategy?
When fishing out demand zones
The MA does not fish out demand zones on the price chart but rather monitors support and resistance levels to signal to buy and sell.
When you're trying to know where the nearest support and resistance levels are
The MA plays a vital role in identifying the closet support and resistance levels.
To double your portfolio
The moving average does not directly relate to your investment portfolio or how it adds up.
Because most community members use it
It is risky to take important decisions because most people in your circle are doing the same.
Back Next Check
To hone your technical trading skills, you're curious about which indicator to use between the Exponential Moving Average (EMA) and Simple Moving Average (SMA). Which of the following statements are true about both indicators?
SMA provides equivalent weight to all prices, while EMA gives more weight to recent prices
Simple Moving Average gives equal weight to prices.
SMA gives more weight to recent prices, while EMA provides equivalent weight to all prices
The reverse is the case in this option; for both indicators.
SMA is based on short-term analysis, while EMA is based on long-term analysis
Short-term and long-term analysis is not the case with SMA and EMA, respectively.
None of the above
There's more specialty to the answer than your general point of view.
Back Next Check
What is the purpose of using Bollinger Bands in technical analysis?
It is a good way to notice market trends
Bollinger band does not function to identify trends.
To know when it's time to hop on the market
The technicality of this indicator disallows it from determining entry points.
To indicate volatility levels
The Bollinger bands express the degree of market volatility.
All of the above
Bollinger bands will not determine everything but will major in rendering how volatile a market is.
Back Next Check
As you become more familiar with the technicality of trading, what can you say so far is the major characteristic of a Bullish divergence?
Bullish Divergence indicates a rise in the stock price as the indicator is falling
This is a distinguishing feature of a bullish divergence.
This is when the stock price is falling, and the indicator is rising
The reverse is rather the case when a bullish divergence is in play.
Bullish Divergence is a potential sell signal
This is the feature of a bearish divergence instead.
Bullish Divergence is a negative signal
This also is a feature of a bearish divergence.
Back Next Check
Aside from attempting to generate a buy and sell signal, for what other reason would you prefer to use the Fibonacci retracements in technical analysis?
To identify trends
Executing the function of market trend identification and historical data assessment is dedicated to specific technical indicators.
To identify potential levels of support and resistance
Fibonacci retracement proves itself worthy when it comes to identifying support and resistance levels.
For a good entry/exit strategy
A good entry and exit strategy.
To predict future prices
It is out of scope to try and predict future prices using the Fibonacci retracement.
Back Check Result
0 out of 7 answers are correct

There’s always room for improvement. Go over some of our help topics and get comfortable with the technical analysis theory. Rest assured you will increase in knowledge on how technical analysis works, when you commit effort and time to learning how you can implement the several strategies. With this, you can be sure to start taking accurate trading decisions when it comes to technical analysis.

It looks like you’ve been practicing for a while now. Keep it up, and you’ll be a pro in the near future. You can always check out our informative posts that’s provided on technical analysis strategy and other similar topics. This will ultimately contribute to your foundational knowledge and soon you’ll be a grand expert on trading strategies and technical analysis.

Perfect! You are doing great. It’s nice to flaunt your mastery on technical analysis and strategy. Be committed to frequent practice and the sky will be your starting point. There are other helpful resources available to keep you up to speed with the entirety of trading the market using tools and indicators.

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