Kindergarten Flashcards
In forex, what are the three main types of analysis?
Fundamental, Technical, Sentiment
Which type of analysis looks at historical price movements to determine the current trading conditions and potential price movement?
Technical Analysis
Which type of analysis looks at economic, social, and political forces that affect the supply and demand of an asset?
Fundamental Analysis
If you wanted to buy the euro because Germany’s economy is booming, which type of analysis are you doing?
Fundamental Analysis
When a trader believes that price will go up, he is feeling…
Bullish
The market reflects all available market information because all traders have access to the same pieces of data. True or False?
False
Support and resistance levels are associated with what type of analysis?
Technical Analysis
Which kind of chart draws together one closing price to the next closing price over a certain period of time?
Line Chart
The bar chart is also called the…
OHLC Chart
What does the peak of the upper shadow of a candlestick indicate?
High Price
Also called a Market Maker, this type of broker makes money from FIXED pip spreads and sometimes taking the opposite side of their clients positions.
Dealing desk
This type of NDD broker allows its clients to see the “depth of market,” or the buy and sell orders of other trade participants.
Electronic Communication Network (ECN)
This type of NDD broker directly uses its network of liquidity providers to determine the best bid/ask price for a position.
Straight Through Processing (STP)
What’s the difference between a Dealing Desk (DD) and a No Dealing Desk (NDD) broker?
In the absence of takers, a DD broker takes the opposite side of your trade, while a NDD broker links your trade to liquidity providers.
Do Dealing Desk brokers have variable pip spreads?
No Dealing Desk brokers have fixed spreads!
STPs have automatic execution without requotes. True or False?
False
Which is not an important things to consider in choosing a broker?
Location
The Financial Conduct Authority (FCA) is a regulatory body of all providers of financial services in…
the UK
What are bucket shops in trading?
Sneaky brokerage firms that “book” a client’s orders without really executing them
What is one good way to separate bad brokers from good ones?
Check out forex forums for other traders’ opinions.
Which of the following is a good way to protect yourself against sneaky brokers?
Compare price feeds of brokers
No matter how fancy your trading platform is, you will still end up losing without
Proper trading discipline
Why is it preferable to trade on DEMO for at least six months before opening a live account?
Gives you time to develop your trading methods in different environments.
