The Ultimate Supply & Demand Quiz

What is the primary reason for trading with supply and demand zones?

• • They provide setups with equal risk and reward

• • They offer high-risk, high-reward setups

• • They offer low-risk, high-reward setups

• • They are the most popular strategy among retail traders

What does a supply zone represent?

• • An area where buyers are dominant

• • An area where sellers are dominant

• • An area where the market is balanced

• • An area with high trading volume

If demand increases and supply remains unchanged, what is the expected impact on price?

• • Price will decrease

• • Price will stay the same

• Price will increase

• • Price will become volatile

What is a common reason for price reversals in supply and demand zones?

• • Supply and demand are balanced

• • There is an imbalance between supply and demand

• High trading volume is present

• • News events impact the market

When identifying supply and demand zones, what should you be looking for?

• • Zones where price consolidates

• • Zones where price is balanced

• •  Zones where price is imbalanced

• •  Zones with high volume only

Why is it important to wait for price to retest a supply or demand zone before entering a trade?

• • To ensure that volume increases

• • To confirm that institutional orders are still present

• • To enter the market at a higher price

• •  To avoid news-related volatility

What typically happens when price moves back into a demand zone?

• Price continues to move downwards

• • Price reverses and moves upwards

• • Price consolidates within the zone

• • Price becomes unpredictable

What is the purpose of institutions using limit orders?

• • To guarantee execution of all shares at once

• To buy or sell at a specific price or better without moving the market too much

• To speculate on short-term price movements

• • To increase trading volume in the market

What happens to unfilled institutional orders left at a supply or demand zone?

• They are canceled after the market closes

• •  They disappear after a few minutes

• • They remain at that level and may be filled when price returns to the zone

• • They automatically convert to market orders

What is the main difference between a limit order and a market order?

• Limit orders are executed immediately, while market orders wait for a specific price.

• •  Limit orders are passive and wait for a specific price, while market orders are aggressive and executed immediately.

• •  Limit orders are used only by retail traders, while market orders are used by institutions.

• • Limit orders are always more expensive than market orders.