Day Trading MCQ Questions Answers

1. What is a speculative trader?

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

3. What is 'fundamental analysis'?

4. How effective is fundamental analysis in day trading?

5. What is meant by a margin call?

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

7. Why should an investor have predetermined exit points?

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

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

10. What type of trading style is short selling?

11. How is 'days to cover' calculated?

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

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

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

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

16. What is 'margin trading?'

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

18. What is meant by trend trading?

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

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

21. Why is it risky to utilize margin accounts?

22. What is the ruling for margin requirement?

23. What is the idea behind fundamental analysis?

24. What is 'news trading?'

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

26. What is day trading?

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

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

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

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

31. What is the fundamental idea behind arbitrage trading?

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

33. What is the primary risk with short selling?

34. What is 'spread'?

35. What is meant by days to cover?

36. Why is news trading a relatively simple strategy?

37. What is meant by 'range trading'?

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

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

40. What is a 'locate'?

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

42. What is meant by 'swing trading'?

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

44. What is meant by 'arbitrage'?

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

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

47. What is the 'settlement date'?

48. What is 'technical analysis'?

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

50. When is stock analysis performed?

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

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

53. What is short selling?

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

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

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

57. What does a limit order do?

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

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

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

61. Why do arbitrage opportunities seldom exist?

62. What is 'FOREX'?

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

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

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

66. What is the main benefit of leveraging capital?

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

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

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

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

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

72. What requirements do brokerages have for day traders?

73. What does algorithmic trading look to profit from?

74. Why is short selling risky?

75. What is 'after hours trading'?

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

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

78. What is the 'futures market'?

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

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

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

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

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