Forex Trading - Summary and Quiz

1. Most online forex brokers offer free _________ accounts.

* margin

* savings

* practice

* brokerage

2. An intra-day trade - also known as a day trade - is one that is opened and closed during the same trading day. _________ trades are opened on one trading day, but closed on another.

* Carry

* Day

* Futures

* Inter-day

3. A carry trade is based on the interest rate differential between two currencies. The idea is to hold _________ the currency with the higher interest rate, while holding _________ a currency with a lower interest rate.

* long,long

* short,long

* short, short

* long, short

4. Because you receive interest on currencies you hold long but must pay interest on currencies you have shorted, the net interest for the position is calculated as the interest you receive _________ the interest you must pay.

* minus

* instead of

* plus

* in addition to

5. The net interest as calculated above is also known as the interest rate carry, or simply, the _________.

* amount you owe

* stop-loss

* volatility

* carry

6. If you have positive carry, your position _________ money while it is open, but if you have negative carry, you must _________ interest while the position is open.

*earns, pay

*costs, pay

* charges, defer

* reduces, generate

7. "Trading on the technicals" refers to trading based on information derived from _________. This is also known as technical analysis.

* market rumors

* price charts

* central banks

* future prices

8. "Trading on the fundamentals" - or "trading the news" - describes traders that attempt to predict the effect _________ such as interest rate changes and labor reports will have on an exchange rate.

* historical prices

* future growth

* price chart patterns

* economic indicators

9. A _________ order is executed immediately when submitted and is priced at the current spot market rate.

* limit

* equity

* market

* Good 'til Cancelled

10. A _________ order is an order to buy or sell a currency, but only when certain conditions are met. These conditions are in the form of instructions and are attached when the order is first created.

* limit

* futures

* stop-loss

* market

11. A limit order that has not yet been executed, is said to be _________.

* cancelled

* pending

* executed

* profitable

12. A _________ order automatically closes an open position when the exchange rate reaches the specified threshold.

* take-profit

* option

* closed

* market

13. A _________ order is used to minimize losses and automatically closes a losing order at the threshold specified.

* market

* stock options

* stop-loss

* forex

14. To apply a markup of half pip on bid price of EURUSD you will add up a value on bid for __________

* +0.00050

* +0.00005

* -0.00050 * -0.00005 15. Which of the trading execution type is best and used mostly when you set up an account with Market Liquidity provider ? * LIFO * FIFO

16. If you have opposite exposure with Liquidity provider A & B like Long 50 Lots with LP 'A' and short 50 lots with LP 'B' so what would be appropriate bridge settings to settle down the exposure ? * 'A' Bid disabled & 'B' Ask disabled * 'B' Bid disabled & 'A' Ask disabled * 'A' Bid disabled & 'A' Ask disabled * 'B' Bid disabled & 'A' Ask disabled For details about answers of above questions in quiz, feel free to reach us on chat or email us at support@forexinventory.com

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