Forex Tests

Question 1

What is the meaning of the term ‘going long’
What is the meaning of the term ‘going short’

Answer 1

Speculating that the base currency will rise.
Speculating that the base currency will fall.

Question 2

What is a ‘lot’?

Answer 2

A unit of measurement for the amount of currency you buy or sell.

Question 3

What are the different types of lots?

Answer 3

Standard, Mini & Micro

Question 4

What is a standard lot?

Answer 4

A standard lot is equivalent to 100,000 units of the base currency
(E.G If trading EUR/USD one standard lot is €100,000)

Question 5

What is a mini lot?

Answer 5

A mini lot is equivalent to 10,000 units of the base currency
(E.G If trading EUR/USD one standard lot is €10,000)

Question 6

What is a micro lot?

Answer 6

A micro lot is equivalent to 1,000 units of the base currency
(E.G If trading EUR/USD one standard lot is €1,000)

Question 7

What does ‘pip’ stand for?

Answer 7

Percentage in Point

Question 8

What is the value of a pip in a standard lot, mini lot and a micro lot?

Answer 8

Standard Lot: $10
Mini Lot: $1
Micro Lot: $0.10

Question 9

What is a pip?

Answer 9

A pip is the smallest price movement that a currency pair can make.

Pips are used by traders to measure price movements and to express the amount of profit or loss on a trade.

Question 10

What is ‘slippage’?

Answer 10

Slippage is the difference between the price you expect and the price you actually get when your trade is executed

Question 11

What are the 3 categories of currency pairs?

Answer 11

1. The ‘Majors’
2. The ‘Crosses’
3. The ‘Exotics’

Question 12

What do ‘Major’ currency pairs always include?

Answer 12

The U.S Dollar.

Question 13

What are ‘Exotic’ Currency pairs?

Answer 13

They consist of one major currency and one currency from an emerging market.

Question 14

What are ‘Cross-currency’ pairs?

Answer 14

currency pairs that do NOT include the U.S Dollar.

Question 15

What are cross currency pairs that involve any of the major currencies also known as?

Answer 15

minors

Question 16

What are the nicknames given to the country codes ‘SEK’ & ‘NOK’ and what country do they represent?

Answer 16

‘Stockie’ - Sweden
‘Nockie’ - Norway

Question 17

What are CEE Currencies?

Answer 17

Central & Eastern European Countries

Question 18

What are the main four CEE currencies to be aware of?

Answer 18

Hungary - HUF
Czech Republic - CZK
Poland - PLN
Romania - RON

Question 19

What is ‘BRIICS’? + What countries are involved?

Answer 19

An acronym given for the association of 6 major emerging national economies
Brazil, Russia, India, Indonesia, China & South Africa

Question 20

What are currency options?

Answer 20

An “option” is a financial instrument that gives the buyer the right or the option, but not the obligation, to buy or sell an asset at a specified price on the option’s expiration date

Question 21

What is a swap/rollover fee?

Answer 21

A fee paid/earned for the procedure of moving an open position from one trading day to another is called a rollover.