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Forex > Preschool > Flashcards

Preschool Flashcards

1
Q

How big is the Forex market?

A

$5 Trillion

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2
Q

What is the largest market in the world?

A

Forex Market

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3
Q

How many letters do currency symbols have?

A

3

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4
Q

What is the nickname for EUR/USD?

A

Fiber

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5
Q

What type of currency pair is USD/MXN?

A

Exotic

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6
Q

Which of the following is NOT a major currency pair?

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

A

EUR/GBP

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7
Q

What type of market is forex?

A

Over-the-Counter Market

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8
Q

What does CME stand for?

A

Chicago Mercantile Exchange

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9
Q

What is the second most traded currency?

A

Euro

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10
Q

How many hours a day is the forex market open?

A

24

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11
Q

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

A

No fixed lot size

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12
Q

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

A

Leverage

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13
Q

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

A

Large commissions

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14
Q

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

A

Strong influence from analysts and brokers

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15
Q

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

A

Forex

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16
Q

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

A

No guaranteed limited risk

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17
Q

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

A

Price manipulation

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18
Q

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

A

Major banks

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19
Q

Which is an example of a decentralized exchange?

A

Forex market

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20
Q

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

A

Interbank Market

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21
Q

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

A

Adjusting interest rates

22
Q

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

A

Speculators

23
Q

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

A

Bretton Woods System

24
Q

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

A

Supply and Demand

25
Q

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

A

Smaller account sizes available

26
Q

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

A

Trade Maker

27
Q

What does “ECN” stand for?

A

Electronic Communications Network

28
Q

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

A

London

29
Q

What time does the Tokyo session start in November?

A

11:00 pm GMT & 6:00 pm EST

30
Q

Name 3 major trading sessions

A

Sydney, Tokyo, London

31
Q

When are the busiest times in the market?

A

During session overlaps

32
Q

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

A

Commercial Companies and Central Banks

33
Q

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

A

30%

34
Q

When is liquidity highest during the New York session?

A

When it overlaps with the European session

35
Q

What is one of the characteristics of the London session?

A

High volatility

36
Q

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

A

Tuesday to Thursday

37
Q

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

A

False

38
Q

Which is the busiest time of the trading day?

A

London-New York overlap

39
Q

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

A

Fridays

40
Q

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?

A

120 pips

41
Q

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

A

Selling

42
Q

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

A

Spread

43
Q

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

A

Margin Trading

44
Q

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

A

0.0001

45
Q

How many units are in a micro lot?

A

1,000

46
Q

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?

A

$200

47
Q

What is another term for the ask price?

A

Offer

48
Q

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

A

Base

49
Q

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

A

Stop-entry Order

50
Q

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

A

Trailing Stop

51
Q

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

A

Zero

52
Q

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

A

One

Forex (11 decks)

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