General Day Trading MCQs

1. What would a day trader do to ensure that profits earned from a security are maintained without selling it immediately?

2. Why is it important for day traders to close out all positions before the day is over?

3. What is the SEC definition of a 'pattern day trader'?

4. What does the $25,000 margin account requirement do to protect a day trader?

5. What would a range trader who sees a breakout most likely do?

6. What is the 'futures market'?

7. What is the end result of most technical analyses?

8. What would be the exit point for an arbitrage trader?

9. What is 'after hours trading'?

10. Why is short selling risky?

11. What does algorithmic trading look to profit from?

12. What requirements do brokerages have for day traders?

13. What would an investor infer from a stock price which has steadily risen for three days?

14. What is the best way to reduce variable expenses?

15. Which one is closest in meaning to arbitrage trading?

16. Which one is an additional requirement of a day trader's account?

17. How does a day trader immediately set their exit point?

18. What is the main benefit of leveraging capital?

19. What is required of a brokerage when they spot a pattern day trader?

20. Which one is a positive attribute often associated with short sellers?

21. What is the concept of ignoring predetermined exit points to allow for further profit?

22. What is 'FOREX'?

23. Why do arbitrage opportunities seldom exist?

24. What is the purpose of sliding the stop loss upwards?

25. By doing which of the following would a day trader be leveraging capital?

26. What type of order will a short seller subsequently place in order to limit their potential losses?

27. What does a limit order do?

28. What can affect the amount of margin required, apart from minimum requirements?

29. What is a simple technique a beginning day trader would use?

30. What would a trader do if they calculated a price based on fundamental analysis which was higher than the current market price?

31. What is short selling?

32. On which counts are the legal requirements on day traders criticized?

33. Why would an investor have an exit before entry?

34. When is stock analysis performed?

35. What is the main risk a day trader is subject to?

36. What is 'technical analysis'?

37. What is the 'settlement date'?

38. What stipulation does the SEC place on a pattern day trader?

39. Which one provides some form of ongoing return on investment?

40. What is meant by 'arbitrage'?

41. What would be the best technique for a day trader to utilize?

42. What is meant by 'swing trading'?

43. What would a news trader potentially do if a stock price falls on seemingly good news?

44. What is a 'locate'?

45. How does a day trader fundamentally leverage their capital?

46. Why is it important for a day trader to have a methodology to adhere to?

47. What is meant by 'range trading'?

48. Why is news trading a relatively simple strategy?

49. What is meant by days to cover?

50. What is 'spread'?

51. What is the primary risk with short selling?

52. Which one is a method of leveraging the capital available?

53. What is the fundamental idea behind arbitrage trading?

54. Why is short selling looked on negatively by some traders?

55. What view of the market does a short seller have?

56. What is the requirement on short sellers regarding locates?

57. What is the usual way traders will leverage their trading capital?

58. What is day trading?

59. Why are traders sufficiently secure in leveraging their capital?

60. What is 'news trading?'

61. What is the idea behind fundamental analysis?

62. What is the ruling for margin requirement?

63. Why is it risky to utilize margin accounts?

64. When a range trader sees a breakout, what does he see?

65. Why is the ruling of a minimum margin often argued?

66. What is meant by trend trading?

67. What is the assumption of a trader who cannot produce the $25,000 margin?

68. What is 'margin trading?'

69. How are day traders able to quickly analyze information in order to make decisions?

70. Why is it dangerous for a day trader to place market orders?

71. Why are margin requirements often lower for spread traders?

72. How have some day traders avoided being classified as day traders under the legal definition?

73. How is 'days to cover' calculated?

74. What type of trading style is short selling?

75. What would be an entry point for a range trader who is going long?

76. How can an investor ensure a specific entry point?

77. Why should an investor have predetermined exit points?

78. When a stock has a breakout, what has happened?

79. What is meant by a margin call?

80. How effective is fundamental analysis in day trading?

81. What is 'fundamental analysis'?

82. Why is arbitrage trading a day trading method only?

83. What is a speculative trader?