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How much do you know about trading?
Test
your trading knowledge with this quick True/False quiz
Bid
& Offer
Long & Short
Market Orders
Limit orders
Stop Orders
Trading Records
Bid & Offer
1.If a trader wants to sell at the current price they hit the
bid?
True
False
2. Another way to express an offer is to call it the "ask"
True
False
3. "Last" is a term that describes the time when the market
last traded?
True
False
4. If a market is currently bid 60.50 & offered at 60.51 the
last trade will be at either 60.50 or 60.51?
True
False
5. If a market if currently bid 20.00 & offered at 20.02, if
you bid 20.01 you will be guaranteed to buy because you are the
best bid?
True
False
6. A trader places an offer if they want to be a buyer?
True
False
Long & Short
7. Short is a trading term that describes a trader who is bullish
about the market?
True
False
8. Long is a trading term that describes a trader who takes a long-term
trading strategy?
True
False
9. If a trader wants to go short they buy a short contract?
True
False
10. To exit a short trade you sell?
True
False
11. A trader who goes long expects the price to rise?
True
False
12. To exit a "long" trade you sell. That sell order is
called going short?
True
False
Market Orders
13. A market order is an order that you would use
if you have a specific price at which you want to
buy or sell at?
True
False
14. A market order is filled immediately at the current price available
at the moment the order is received? (assuming the market is open)
True
False
15. If the market is currently bid 15.00 & offered at 15.01
you are guaranteed of buying at 15.01 if you place a market order?
True
False
16. Price is the most important aspect of a market order?
True
False
17. A market order avoids "Chasing" the market?
True
False
18. You can usually wait on-line to your broker when you place a
market order?
True
False
19. Selling at market can sometimes be at a lower price than the
last trade?
True
False
Limit orders
20. Limit orders describe orders which limit your
risk?
True
False
21. A buy limit order will always be filled at your limit price?
True
False
22. A sell limit order can be filled at a lower price than your
limit e.g. your sell limit is at 21.07 & you can be filled at
21.06?
True
False
23. Time is of paramount importance with a limit order?
True
False
24. If you are buying at a limit of 10.09 & after you place
your order the market trades down to 10.08 you are always guaranteed
of being set at 10.09 (your buying limit) because the market has
traded down through your limit?
True
False
25. If you are selling at 5.06 & after you place your order
the market trades up to 5.06 a number of times (but not higher than
5.06), you will be certain that you have sold because it has traded
at your limit price?
True
False
26. If you place a buy limit order at 10.10 before the market opens,
& the market then opens at 10.05 & trades up to 10.10. You
will always be filled at your limit price of 10.10?
True
False
Stop Orders
27. Stop orders can be used to manage your risk?
True
False
28. Stop orders can be used to enter a new position?
True
False
29. Placing a stop order reduces the need for you to constantly
watch the market because the broker will trigger the order when
it reaches your specified level?
True
False
30. A stop order can be used to lock in a profit?
True
False
31. If you want to limit your risk on a long position you can place
a sell stop order?
True
False
32. Both sell stop & buy stop orders are valid order types?
True
False
33. If you place a sell stop order at 10.05 when the market is trading
at 10.90, & the market then trades down to a low of 10.06 (bid
10.05, offered at 10.06 & last trade at 10.06). That will trigger
your stop order because it is bid 10.05 - your stop level?
True
False
34. If the market is currently trading at 18.75 & you want to
buy when it gets down to 18.65 you place a buy stop at 18.65?
True
False
35. When you place a stop order you will always be filled at your
stop price e.g. a buy stop at 12.03 when triggered will be filled
at 12.03 & never higher than 12.03?
True
False
36. If you place a sell stop at 4.50 when the market is trading
at 5.00 & the market subsequently trades down to a low of 4.51.
Then the next trade is at 4.45 the broker will not trigger your
stop because it has not traded at your stop level?
True
False
Trading Records
37. Keeping track of your open position is one of
the most important aspects of keeping track of your orders?
True
False
38. Keeping track of your trading history can be used to critique
your trading performance?
True
False
39. It is only necessary to write down your orders when they get
a fill?
True
False
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