quiz 2

What is the purpose of conducting market research before making trades?

• To predict market movements accurately

• To develop a trading plan

• To analyze economic indicators

• To evaluate the impact of news events

Why is risk management important in trading?

• To avoid making impulsive trading decisions

• To maximize profits on every trade

• To eliminate all potential losses

• To predict future market trends

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

• To identify potential entry and exit points

• To calculate risk-reward ratios

• To analyze market liquidity

• To evaluate the impact of news events

What is the significance of moving averages in technical analysis?

• To identify overbought or oversold conditions

• To predict future market trends

• To analyze the impact of news events

• To evaluate the performance of a specific stock

Why is it important to understand market volatility as a trader?

• To identify potential trading opportunities

• To avoid making impulsive trading decisions

• To eliminate all potential losses

• To evaluate the performance of a specific stock

What is the impact of interest rates on currency exchange rates?

• They have no impact on currency exchange rates

• They cause currency exchange rates to remain stable

• They influence supply and demand for currencies

• They only affect stock market prices

How can technical indicators help traders in their decision-making process?

• By predicting future market trends accurately

• By eliminating all potential losses

• By analyzing economic indicators

• By identifying overbought or oversold conditions

What is the role of market sentiment in trading?

• To predict market movements accurately

• To analyze economic indicators

• To evaluate the impact of news events

• To influence price trends

Why is it important to have a trading plan?

• To eliminate all potential losses

• To predict future market trends accurately

• To avoid making impulsive trading decisions

• To analyze economic indicators

How can a trader effectively manage risk?

• By eliminating all potential losses

• By diversifying their portfolio

• By predicting future market trends accurately

• By following hot tips or rumors