Technical Analysis Quiz

What is technical analysis?

• A method of evaluating securities by analyzing financial statements

• A process of predicting market trends based on astrology

• A method of evaluating securities by analyzing statistics generated by market activity.

• A type of software used for analyzing technical issues

What are the key principles of technical analysis?

• Elliott wave theory, volume analysis, and MACD

• Fundamental analysis, dividend yield, and P/E ratio

• Trend analysis, support and resistance levels, and chart patterns

• Moving averages, Fibonacci retracement, and RSI

Explain the concept of support and resistance in technical analysis.

• Support and resistance are key concepts in technical analysis used to identify potential price levels where the price may reverse or experience a significant increase in trading activity.

• Support and resistance only apply to fundamental analysis

• Support and resistance are fixed price levels that never change

• Support and resistance are irrelevant in technical analysis

What are the different types of charts used in technical analysis?

• Line charts, bar charts, and candlestick charts

• Pie charts, scatter plots, and radar charts

• Pictograms, Gantt charts, and flowcharts

• Histograms, area charts, and bubble charts

How do moving averages help in technical analysis?

• They are only applicable to cryptocurrency trading.

• They predict future stock prices with 100% accuracy.

• They cause more confusion and are not useful in analysis.

• They smooth out price data to identify trends and potential reversals.

Explain the concept of trend lines in technical analysis.

• Trend lines are used to measure the amount of caffeine in a stock.

• Trend lines are used to predict the weather patterns for a particular stock.

• Trend lines are used to identify and visualize the direction of a security's price movement.

• Trend lines are used to determine the political affiliations of a stock.

What are the common technical indicators used in technical analysis?

• Volume analysis, Fibonacci retracement, Candlestick patterns

• PE ratio, Dividend yield, Market capitalization

• GDP growth rate, Unemployment rate, Inflation rate

• Moving averages, RSI, MACD, Bollinger Bands, stochastic oscillators

How is volume used in technical analysis?

• To determine the company's revenue

• To calculate the number of shares traded

• To measure the strength of a price movement.

• To predict future market trends

What are the limitations of technical analysis?

• Objective, quick, highly predictive

• Consistent, easy, accurate

• Unbiased, efficient, reliable

• Subjectivity, time-consuming, limited predictive power

Explain the importance of risk management in technical analysis.

• It is only relevant for short-term trading

• It only benefits experienced traders

• It helps traders and investors to identify and mitigate potential risks associated with their investment decisions.

• It has no impact on investment decisions