FOREX Trading: Beginner Level Quiz! Trivia
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Forex trading: Beginner levels quiz trivia. The foreign exchange market is a global marketplace for exchanging national currencies against one another. Some people make a lot of money when they understand how the trade works and others keep losing due to making one small mistake. Do take a look at the questions below and see if you are knowledgeable enough to tackle them all based on what you know about forex trading!
- 1.
- A.
Buying or selling the variable currency and profiting or losing on the variable currency
- B.
Buying the base currency and profiting on the variable currency
- C.
Selling the variable currency and losing on the base currency
- D.
Buying or selling the base currency and profiting or losing on the variable currency
Correct Answer
D. Buying or selling the base currency and profiting or losing on the variable currencyExplanation
This answer suggests that the act of buying or selling the base currency is what leads to profiting or losing on the variable currency. In foreign exchange trading, the base currency is the currency being bought or sold, while the variable currency is the currency being exchanged for the base currency. Therefore, buying or selling the base currency will determine whether one makes a profit or loss on the variable currency.Rate this question:
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- 2.
- A.
EUR
- B.
USD
Correct Answer
B. USD -
- 3.
- A.
USD
- B.
JPY
Correct Answer
B. JPY -
- 4.
- A.
Above the entry price
- B.
On the entry price
- C.
Below the entry price
- D.
Below and above the entry price
Correct Answer
C. Below the entry price -
- 5.
- A.
Above the entry price
- B.
Below the entry price
- C.
On the entry price
- D.
Below the selling price
Correct Answer
B. Below the entry priceExplanation
The correct answer is "Below the entry price." This means that the selling price is lower than the initial price at which the item was purchased or entered into. This could indicate a loss or a decrease in value.Rate this question:
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- 6.
- A.
Know the rate of the currency pair
- B.
Know the trade volume and the currency pair's number of digits
- C.
Know weather you will open a buy or a sell position
- D.
Know the currency pair's interest rate
Correct Answer
B. Know the trade volume and the currency pair's number of digitsExplanation
To determine the correct answer, it is important to consider the factors that affect trading decisions. The trade volume and the number of digits in a currency pair are crucial in determining the potential profit or loss. The trade volume represents the size of the position, while the number of digits indicates the level of precision and volatility in the market. By knowing these factors, traders can assess the potential risks and rewards associated with a specific currency pair and make informed decisions on whether to open a buy or sell position.Rate this question:
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- 7.
- A.
USD
- B.
EUR
- C.
Base currency
- D.
Variable Currency
Correct Answer(s)
A. USD
D. Variable CurrencyExplanation
The given answer states that the base currency is USD and the variable currency is Variable Currency. This implies that the value of Variable Currency is being compared or converted to USD. The base currency is usually the currency in which an exchange rate is quoted, and the variable currency is the currency whose value is being compared or converted. Therefore, in this case, the exchange rate or comparison is being made between USD and Variable Currency.Rate this question:
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- 8.
- A.
1,000,000 units of the base currency
- B.
100,000 units of the base currency
- C.
100,000 units of the variable currency
- D.
100,000 units of the base and variable currency
Correct Answer
B. 100,000 units of the base currencyExplanation
The correct answer is 100,000 units of the base currency. This means that there are 100,000 units of the base currency involved in the given scenario. The other options either have a different quantity of units or involve the variable currency as well.Rate this question:
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- 9.
- A.
Stay at the entry price
- B.
Go up
- C.
Go Down
- D.
Fluctuate
Correct Answer
C. Go DownExplanation
The correct answer is "Go Down". This suggests that the price is expected to decrease. This could be due to various factors such as market trends, economic conditions, or specific events affecting the value of the asset. It indicates that it would not be wise to buy at the current price as it is expected to decrease in the near future.Rate this question:
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- 10.
- A.
500 USD
- B.
5,000 EUR
- C.
830 USD
- D.
500 EUR
Correct Answer
D. 500 EURExplanation
The answer is 500 EUR because it is the only option given in euros. The other options are in USD, so they are not relevant to the question.Rate this question:
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- 11.
- A.
The market is bulish and the base currency is getting weaker
- B.
The market is bullish and the variable currency is getting stronger
- C.
The market is bearish and the variable currency is getting weaker
- D.
The market is bullish and the base currency is getting stronger
Correct Answer
D. The market is bullish and the base currency is getting strongerExplanation
In a bullish market, the prices of assets are rising, indicating a positive sentiment and investor confidence. When the base currency is getting stronger, it means that it is appreciating in value compared to other currencies. This can be interpreted as a sign of economic strength and stability, further supporting the notion of a bullish market.Rate this question:
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- 12.
- A.
Open a buy stop order
- B.
Open a sell limit order
- C.
Open a buy limit order
- D.
Open a sell stop order
Correct Answer
C. Open a buy limit orderExplanation
A buy limit order is placed when a trader wants to buy an asset at a specific price or lower. This means that the trader is willing to wait until the price drops to their desired level before executing the trade. By placing a buy limit order, the trader ensures that they do not buy the asset at a higher price than they are comfortable with.Rate this question:
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- 13.
- A.
Open a sell limit order
- B.
Open a buy stop order
- C.
Open a sell stop order
- D.
Open a buy limit order
Correct Answer
C. Open a sell stop orderExplanation
A sell stop order is used when a trader wants to sell a security at a specific price or lower. This order type is typically used to limit potential losses or to initiate a short position. When the market price reaches or falls below the specified stop price, the sell stop order becomes a market order and is executed at the best available price. Therefore, opening a sell stop order means placing an order to sell a security once its price reaches or falls below a certain level.Rate this question:
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- 14.
If you open a sell pending order below the current market price your stop loss would be:
- A.
Above the entry price
- B.
Below the entry price
- C.
At the market price
- D.
None of the above
Correct Answer
A. Above the entry priceExplanation
When you open a sell pending order below the current market price, it means that you are anticipating a decrease in the price of the asset. In order to limit your potential losses if the price goes against your prediction, you would set a stop loss above the entry price. This way, if the price starts to rise instead of fall, your position will be automatically closed at the stop loss level, preventing further losses.Rate this question:
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