Understanding Technical Indicators in Trading

What is the primary purpose of technical indicators in trading?

• To eliminate all risks in trading

• To predict future stock prices with certainty

• To guarantee profits in every trade

• To identify trends and potential entry and exit signals

Which of the following is a common trend-tracking indicator?

• Chaikin Money Flow

• Moving Average

• Put/Call Ratio

• Stochastic

How can moving averages be used in trading?

• To predict exact future prices

• To determine buy signals based on price movements

• To eliminate market volatility

• To ensure a stock will rise

What do oscillators typically measure?

• The historical P/E ratio

• The speed of price changes

• The volume of trades

• The number of market participants

What does a rising stochastic line indicate?

• Neutral market conditions

• Bearish momentum

• Bullish momentum

• Decreasing volume

What is the primary use of sentiment indicators?

• To gauge investors' beliefs about market direction

• To trade specific securities

• To determine the volume of trades

• To calculate exact stock prices

What does a put/call ratio above one suggest?

• High trading volume

• Excessive bearishness

• Neutral market conditions

• Excessive bullishness

What is the Arms Index used for?

• To measure investor sentiment

• To compare rising and falling stocks

• To calculate moving averages

• To predict future stock prices

What does a measure of one or less in the Arms Index indicate?

• The market is highly volatile

• The market is neutral

• More money is going into advancers

• More money is leaving stocks

Which indicator is NOT a flow-of-funds indicator?

• Commitment of Traders report

• Stochastic

• On-balance Volume

• Chaikin Money Flow