Fundamental and Technical Analysis

Question 1

is a method of assessing a security’s intrinsic value by analyzing various macroeconomic and microeconomic factors

Answer 1

Fundamental Analysis

Question 2

The ultimate goal of Fundamental Analysis

Answer 2

to quantify a security’s intrinsic value.

Question 3

___________ can then be compared to its ____________ to help with investment decisions.

Answer 3

intrinsic value, current market price

Question 4

aims to determine the “_____________” (true value) of a security.

Answer 4

correct price

Question 5

Fundamental analysis is an extremely comprehensive approach that requires a deep knowledge of ______________________

Answer 5

accounting, finance, and economics

Question 6

Components of Fundamental Analysis

Answer 6

• Economic analysis
• Industry analysis
• Company analysis

Question 7

This approach immediately dives into the analysis of individual stocks.

Answer 7

Bottom-up

Question 7

This approach starts the analysis with the consideration of the health of the overall economy.

Answer 7

Top-down

Question 8

a tool, or method, used to predict the probable future price movement of a security – such as a stock or currency pair – based on market data.

Answer 8

Technical Analysis

Question 9

indicator of Future Performance

Answer 9

Past Price

Question 10

2 primary variables for technical analysis

Answer 10

1. Time Frames
2. Technical Indicators

Question 11

Popular time frames

Answer 11

• 5-minute chart
• 15-minute chart
• Hourly chart
• 4-hour chart
• Daily chart

Question 12

display the high, low, open, and closing prices of a security for a specific period. It reflect the impact of investor sentiment on security prices and are used by technical analysts to determine when to enter and exit trades.

Answer 12

Candlestick

Question 13

Candlesticks originated from ______________________ to track market prices and _______________ hundreds of years before becoming popularized in the ____________

Answer 13

Japanese rice merchants and traders, daily momentum, United States

Question 14

2 Foundational concepts in technical analysis

Answer 14

Support and Resistance

Question 15

occurs when a downtrend is expected to pause due to a demand concentration.

Answer 15

Support

Question 16

occurs when an uptrend is expected to pause temporarily, due to a concentration of supply.

Answer 16

Resistance

Question 17

Technical analysts use support and resistance levels to identify ________ on a chart where the probabilities favor a _______ or _______ of a ____________

Answer 17

price points, pause, reversal, prevailing trend

Question 18

a simple technical analysis tool that smooths out price data by creating a constantly updated average price.

Answer 18

Moving Average

Question 19

a technical analysis indicator, or calculations used to determine the overall trend of the market over different time frames

Answer 19

Pivot Point

Question 20

which usually also identify several support and resistance levels in addition to the pivot point, are used by many traders to identify price levels for entering or closing out trades

Answer 20

Daily Pivot Point indicators

Question 21

often mark significant support or resistance levels or the levels where trading is contained within a range. If trading soars (or plummets) through the daily pivot and all the associated support or resistance levels, this is interpreted by many traders as “breakout” trading that will shift market prices substantially higher or lower, in the direction of the breakout.

Answer 21

Pivot point levels

Question 22

was a 12th-century mathematician who developed a series of ratios that is very popular with technical traders.

Answer 22

Fibonacci

Question 23

are commonly used to pinpoint trading opportunities and both trade entry and profit targets that arise during sustained trends.

Answer 23

Fibonacci ratios/levels

Question 24

Primary Fibonacci ratio

Answer 24

.24
.38
.76
.62

Question 25

it can be drawn between any two significant price points, such as a high and a low. It will then create the levels between those two points.

Answer 25

Fibonacci Indicator

Question 26

do not use percentages and are based on set fixed numbers: the high, low, and close of the prior day.

Answer 26

Pivot Points

Question 27

These strategies involve entering long positions when a security is trending higher and placing a stop-loss below key trendline support levels.

Answer 27

Trendlines and chart patterns

Question 28

The smartest traders are always watching for _________ that signals from their chosen indicators may be __________.

Answer 28

warning signs, misleading