Mastering Forex Trading Concepts

What are the two currencies called in a currency pair?

• Base currency and quote currency

• Leading currency and trailing currency

• Main currency and side currency

• Primary currency and secondary currency

Which analysis focuses on price movements and chart patterns?

• Quantitative analysis

• Technical analysis

• Sentiment analysis

• Fundamental analysis

What is the primary economic report that affects currency values?

• Gross Domestic Product (GDP) report

• Consumer Price Index (CPI) report

• Retail Sales report

• Non-Farm Payroll (NFP) report

What is the purpose of setting a stop-loss order in trading?

• To ensure automatic buying of stocks.

• To track market trends effectively.

• To limit potential losses in trading.

• To increase potential gains in trading.

Which indicator is commonly used to measure market volatility?

• VIX (Volatility Index)

• NASDAQ Composite

• Dow Jones Industrial Average

• S&P 500 Index

What does the term 'pips' refer to in Forex trading?

• Pips refer to the total amount of money in a Forex account.

• Pips are a type of currency pair in Forex trading.

• Pips indicate the number of trades executed in a day.

• Pips are the smallest price movement in Forex trading.

How does interest rate changes impact currency values?

• Currency values are determined solely by government policies.

• Higher interest rates always lead to lower currency values.

• Interest rate changes impact currency values by influencing capital flows; higher rates strengthen a currency, while lower rates weaken it.

• Interest rates have no effect on currency values.

What is the significance of support and resistance levels in technical analysis?

• Support and resistance levels indicate the overall market trend.

• Support and resistance levels help traders identify potential reversal points in price movements.

• Support and resistance levels determine the exact price of an asset.

• Support and resistance levels are used to calculate trading volume.

What is the role of economic indicators in fundamental analysis?

• Economic indicators are only relevant for short-term trading strategies.

• Economic indicators are primarily used for technical analysis rather than fundamental analysis.

• Economic indicators have no impact on stock market trends.

• Economic indicators are crucial for evaluating economic conditions and guiding investment decisions in fundamental analysis.

What strategy can traders use to minimize potential losses?

• Invest in high-risk stocks only

• Use stop-loss orders and diversify the portfolio.

• Concentrate all funds in one asset

• Ignore market trends