1. Identify the Piercing Pattern on the chart: A, B or C? Is it a strict piercing pattern? B, Yes, it is a strict Piercing Pattern A strict Piercing Pattern requires that the white candle open under the prior low and also requires that both candles be long. 2. A strict Bullish Engulfing Pattern requires only that the second candle is tall and white and wraps around high-low range of the first candle. False: Also requires that the first candle is small and dark or a doji, Chart shows a strict Bearish Engulfing Pattern, where the first candle's real body is small. 3. With a Bear Sash, the highest high of both candles is used as resistance. True 4. With a Harami pattern, the trend is not critical. True 5. A "Power Candle: is another name for what candlestick pattern? _________________ Hammer with a white real body Bullish/Bearish Counterattack Hammer with a black real body Shooting Star 6. The bearish counterpart of a Hammer is the ____________. Shooting Star Gravestone Doji Hanging Man None of the above 7. The low of a Morning Star is considered support. True 8. The rarest candlestick pattern (bearish/bullish) in the candle progression are ______________. Strict Bull/Bear Counterattacks Strict Hammer Strict Bullish/Bearish Engulfing Patterns Strict Bull/Bear Sashes 9. With a Dark Cloud Cover, the highest high of both candles is used as resistance. True 10. Candlestick patterns measure __________________. Changes in investor psychology Price Trends Potential price targets All of the above 11. Buying on a breakout above the high of a Bearish Engulfing Pattern is an example of a/an __________________ trade. Momentum Swing "Fade the breakout" None of the above 12. With a Separating Line, the market trend is not important. True; This chart shows a Separating Line also representing a selling climax. See heavy volume. 13. With a Shooting Star, the upper shadow must be at least three times the height of the real body. False, upper shadow must be at least two times the height of the real body 14. The development of a candlestick pattern is reason enough to enter a trade. False, need candle confirmation 15. Volume measures the ____________of a price move. Intensity Duration Speed None of the above 16. Technical indicators are used by traders to alert, confirm and predict. True 17. Bollinger Bands are used to measure market _______________. Volatility Trend Participation All of the above 18. Technical indicators are derivatives of price action, not direct reflections of the price action. True 19. Moving averages can be used to define a trend as well as confirm a support/resistance level. True; 50-day moving average sloping lower = downtrend. See how the April 2017 Gold contract failed each time it got above the 50-day moving average, until finally breaking above in January and the moving average reverses roles and provides support 20. The Stochastic and RSI indicators measure market price trend. False: Momentum 21. A positive divergence takes place when price makes a lower-low and the Stochastic indicator forms a/an ________ Higher-low Lower-low Equal-low None of the above 22. The RSI is considered overbought with a reading above ______ and oversold with a reading below ____. 70/30 60/40 65/45 90/10 23. The Moving Average Convergence/Divergence (MACD) is the __________. Spread between two exponential moving averages Spread between two simple moving averages Spread between price and volume None of the above 24. Support and resistance identify areas of supply and demand. True 25. A trader should sell at support and buy at resistance. False. Buy at support and sell at resistance 26. The more times price hits a support or resistance area, the _______ that support or resistance becomes. Weaker Stronger 27. Former resistance becoming new support is an example of ________. Change of polarity Candle confirmation Price divergence All of the above 28. _________________must always be taken into consideration when entering a trade. A candle signal, even if confirmed by other indicators, is not enough. Risk/Reward Volume Western Indicators All of the above 29. Paper trading helps develop discipline and confidence. True 30. Paper trading is exposure to experience without the need to develop a trading plan. False. Paper trading is exposure to experience without the risk. 31. An exit strategy consists of how many parts? _______ Two: Where you will get out if the trade does not go in your favor and where you will take profits if it does go in your favor. One Three None of the above 32. Stops protect your capital if a trade goes against you. True 33. There are two types of exit stops. They are: Physical Mental Volume-Driven 34. When setting a stop, market ____________must be taken into consideration, otherwise you may get stopped out prematurely. Noise Price Volume None of the above 35. Calculating the _____________ for recent price action on a chart can help with stop placement and avoiding premature exits. Average True Range Moving Average Average Volume All of the Above 36. Moving averages work best in what type of market? Trending Lateral/Sideways Range Low Volume High Volume 37. Stochastic measure the relationship between the current closing price and the price range over a given period. True 38. Signals from the ________Stochastic are more reliable and popular in use. Slow Fast Dual None of the Above 39. One of the most important concepts in identifying support and resistance is Change of Polarity True 40. ______ is another name for an area on a chart where sellers are expected to step in. Supply/Resistance Average True Range Demand/Support None of the above Those that bought at the initial highs lost money on the decline. They represent Supply. At the retest of the highs they now have a chance to get out. 41. In regards to Trading Psychology, ______________ gives you the flexibility to turn a losing trade into a scratch trade. Trading smaller Trading larger Paper Trading None of the above 42. Using multiple time frames and simple trend indicators will help you, as a trader, develop a _____________ Directional bias Best-guess scenario Mental exit stop All of the above 43. The minimum Risk/Reward Ratio for a trade should be ____________. 2 to 1 1 to 1 3 to 1 None of the Above 44. Indicators such as Stochastics and RSI oscillate between _________. 0 and 100 20 and 80 30 and 70 None of the above 45. A _________ is used to exit a trade if it does not go in your favor over a predetermined amount of time. Time Stop Mental stop Physical stop None of the above 46. In regards to exit stops, there is no perfect strategy. True 47. On occasion, it is acceptable to move an exit stop down when in a long position. False 48. The number one rule of trading is keep your losses small and let your winners run. True 49. Low volatility leads to high volatility. True 50. Wide range candles mean momentum is slowing. False Narrow 51. The more signals (Eastern or Western) that converge, the more likely a __________. Reversal Trend Continuation Price pattern None of the above Bull Sash, test of support, positive divergence on the Stochastic. All signs point toward a reversal. 52. Candle signals must be evaluated and acted upon within the market's _____________. Context Price range Volume pattern None of the above 53. A valid candlestick line or pattern requires the shape of the line or pattern be evaluated along with the _________. Preceding trend Evaluation of technical indicators Volume All of the above 54. If a doji session makes a new high for the move, then wait for bearish confirmation by a close under the doji's _______. Close High Low Open New high with a doji. Next session closed below doji's close. On the retest a Bearish Harami formed and the ongoing negative divergence between price and the Stochastic remained intact. 55. A breakout to the upside from a price channel signals ______________. An acceleration of the trend A deceleration of the trend An overbought condition An oversold condition 56. An ascending tringle is a ___________ pattern. Bullish Bearish Neutral 57. A price target is derived from a head and shoulders top by measuring the distance from the head to the _____________. Left shoulder Neckline Right Shoulder 58. The ___________ of a box range is used to derive a price target. Height Width Duration 59. Symmetrical triangles can be continuation or reversal patterns. True 60. Once a price pattern is broken, retests of the break point are uncommon. False .