Preschool Flashcards
How big is the Forex market?
$5 Trillion
What is the largest market in the world?
Forex Market
How many letters do currency symbols have?
3
What is the nickname for EUR/USD?
Fiber
What type of currency pair is USD/MXN?
Exotic
Which of the following is NOT a major currency pair?
a. NZD/USD
b. EUR/USD
c. EUR/GBP
EUR/GBP
What type of market is forex?
Over-the-Counter Market
What does CME stand for?
Chicago Mercantile Exchange
What is the second most traded currency?
Euro
How many hours a day is the forex market open?
24
When trading in the forex market, what is the smallest lot size you can trade?
No fixed lot size
What is the term used to describe the ability to control contract sizes much larger than your deposit?
Leverage
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
Large commissions
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
Strong influence from analysts and brokers
Which market has more liquidity - the forex market or the futures market?
Forex
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
No guaranteed limited risk
What is the biggest disadvantage of going through a centralized exchange?
Price manipulation
Which entity sits at the very top of the forex ladder?
Major banks
Which is an example of a decentralized exchange?
Forex market
The collection of the world’s super banks, which determine exchange rates, is also known as what?
Interbank Market
Which Central Bank policy action tends to have the biggest affect on exchange rates?
Adjusting interest rates
Which market players account for roughly 90% of trading volume?
Speculators
Which global agreement set the exchange rate of all currencies against gold?
Bretton Woods System
In a free-floating system, what determines exchange rates?
Supply and Demand
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
Smaller account sizes available
Which among the three is not a type of broker?
a,Market maker
b. ECN
C. Trade Maker
Trade Maker
What does “ECN” stand for?
Electronic Communications Network
Based on the average pip movement per session, during which session does EUR/USD have the most movement?
London
What time does the Tokyo session start in November?
11:00 pm GMT & 6:00 pm EST
Name 3 major trading sessions
Sydney, Tokyo, London
When are the busiest times in the market?
During session overlaps
Name two of the main market participants during the Asian session.
Commercial Companies and Central Banks
Approximately how much of forex transactions take place during the London session?
30%
When is liquidity highest during the New York session?
When it overlaps with the European session
What is one of the characteristics of the London session?
High volatility
Based on the average pip range per day, which are the best days to trade?
Tuesday to Thursday
True or False. Liquidity is lower when there are more people participating in the markets.
False
Which is the busiest time of the trading day?
London-New York overlap
Which day of the week has the largest potential for reversals?
Fridays
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?
120 pips
In forex jargon, when you are going short, you are said to be…
Selling
What is the difference between the bid and ask price called?
Spread
What is the term used to describe trading with borrowed capital?
Margin Trading
In the quote EUR/USD = 1.42345, what is one pip equivalent to?
0.0001
How many units are in a micro lot?
1,000
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?
$200
What is another term for the ask price?
Offer
In a currency pair, the first currency is called the…
Base
What do you call an order that is placed to buy above the market or sell below the market at a certain price.
Stop-entry Order
What do you call a stop loss order attached to a trade that moves as price fluctuate?
Trailing Stop
How much money do you risk when you’re trading demo?
Zero
As a newbie, how many currency pairs should you concentrate on?
One
