Preschool

Question 1

How big is the Forex market?

Answer 1

$5 Trillion

Question 2

What is the largest market in the world?

Answer 2

Forex Market

Question 3

How many letters do currency symbols have?

Answer 3

3

Question 4

What is the nickname for EUR/USD?

Answer 4

Fiber

Question 5

What type of currency pair is USD/MXN?

Answer 5

Exotic

Question 6

Which of the following is NOT a major currency pair?

a. NZD/USD
b. EUR/USD
c. EUR/GBP

Answer 6

EUR/GBP

Question 7

What type of market is forex?

Answer 7

Over-the-Counter Market

Question 8

What does CME stand for?

Answer 8

Chicago Mercantile Exchange

Question 9

What is the second most traded currency?

Answer 9

Euro

Question 10

How many hours a day is the forex market open?

Answer 10

24

Question 11

When trading in the forex market, what is the smallest lot size you can trade?

Answer 11

No fixed lot size

Question 12

What is the term used to describe the ability to control contract sizes much larger than your deposit?

Answer 12

Leverage

Question 13

Which of the following is NOT an advantage of the forex market over the stock market?

a. Large commissions
b. Short selling without an uptick
c. 24-hour market

Answer 13

Large commissions

Question 14

Which of the following is a disadvantage of the stock market?

a. No middlemen
b. Strong influence from analysts and brokers
c. Instant execution of market orders

Answer 14

Strong influence from analysts and brokers

Question 15

Which market has more liquidity - the forex market or the futures market?

Answer 15

Forex

Question 16

Which of the following is NOT an advantage of the forex market over the futures market?

a. Price certainty
b. Minimal commissions
c. No guaranteed limited risk

Answer 16

No guaranteed limited risk

Question 17

What is the biggest disadvantage of going through a centralized exchange?

Answer 17

Price manipulation

Question 18

Which entity sits at the very top of the forex ladder?

Answer 18

Major banks

Question 19

Which is an example of a decentralized exchange?

Answer 19

Forex market

Question 20

The collection of the world’s super banks, which determine exchange rates, is also known as what?

Answer 20

Interbank Market

Question 21

Which Central Bank policy action tends to have the biggest affect on exchange rates?

Answer 21

Adjusting interest rates

Question 22

Which market players account for roughly 90% of trading volume?

Answer 22

Speculators

Question 23

Which global agreement set the exchange rate of all currencies against gold?

Answer 23

Bretton Woods System

Question 24

In a free-floating system, what determines exchange rates?

Answer 24

Supply and Demand

Question 25

Which of the following is an advantage of retail forex brokers over the interbank market? a. High barriers to entry b. Smaller account sizes available c. Slower transactions

Answer 25

Smaller account sizes available

Question 26

Which among the three is not a type of broker? a,Market maker b. ECN C. Trade Maker

Answer 26

Trade Maker

Question 27

What does "ECN" stand for?

Answer 27

Electronic Communications Network

Question 28

Based on the average pip movement per session, during which session does EUR/USD have the most movement?

Answer 28

London

Question 29

What time does the Tokyo session start in November?

Answer 29

11:00 pm GMT & 6:00 pm EST

Question 30

Name 3 major trading sessions

Answer 30

Sydney, Tokyo, London

Question 31

When are the busiest times in the market?

Answer 31

During session overlaps

Question 32

Name two of the main market participants during the Asian session.

Answer 32

Commercial Companies and Central Banks

Question 33

Approximately how much of forex transactions take place during the London session?

Answer 33

30%

Question 34

When is liquidity highest during the New York session?

Answer 34

When it overlaps with the European session

Question 35

What is one of the characteristics of the London session?

Answer 35

High volatility

Question 36

Based on the average pip range per day, which are the best days to trade?

Answer 36

Tuesday to Thursday

Question 37

True or False. Liquidity is lower when there are more people participating in the markets.

Answer 37

False

Question 38

Which is the busiest time of the trading day?

Answer 38

London-New York overlap

Question 39

Which day of the week has the largest potential for reversals?

Answer 39

Fridays

Question 40

If you purchase 10,000 units of GBP/USD at an exchange rate of 1.5000 and close out one week later at 1.5120, how much profit will you earn in pips?

Answer 40

120 pips

Question 41

In forex jargon, when you are going short, you are said to be...

Answer 41

Selling

Question 42

What is the difference between the bid and ask price called?

Answer 42

Spread

Question 43

What is the term used to describe trading with borrowed capital?

Answer 43

Margin Trading

Question 44

In the quote EUR/USD = 1.42345, what is one pip equivalent to?

Answer 44

0.0001

Question 45

How many units are in a micro lot?

Answer 45

1,000

Question 46

If you wanted to trade a $20,000 position, how much money will be set aside in your account if you are using a 100:1 leverage?

Answer 46

$200

Question 47

What is another term for the ask price?

Answer 47

Offer

Question 48

In a currency pair, the first currency is called the...

Answer 48

Base

Question 49

What do you call an order that is placed to buy above the market or sell below the market at a certain price.

Answer 49

Stop-entry Order

Question 50

What do you call a stop loss order attached to a trade that moves as price fluctuate?

Answer 50

Trailing Stop

Question 51

How much money do you risk when you're trading demo?

Answer 51

Zero

Question 52

As a newbie, how many currency pairs should you concentrate on?

Answer 52

One