Forex trading Exam Questions with Correct Answers

How much money should you generally start with forex trading? - ANSWER-£250.00 what is the price of the currency a reflection of? - ANSWER-a reflection of what the market thinks about the current and future condition of a country's economy compared to other economies. what are the two main aims of a forex trader? - ANSWER-To buy a currency pair when exchange rates are expected to rise and to sell a currency pair when exchange rates are expected to fall. what are the currency pairs divided into? What currency pairs should you start off trading? - ANSWER-Majors, exotics and crosses. the common currency pairs. what are majors? - ANSWER-developed economies, most liquid, low spreads, stable are predictable in relation to other asset classes. what are the top major currencies? - ANSWER-USD, EUR, JPY, GBP What are crosses? - ANSWER-currency pairs with the absence of the us dollars. you can have different dominated crosses such as: euro crosses, yen crosses and the pound crosses. what are exotic currencies? - ANSWER-currencies from developing countries, extremely liquid, very high spreads. whta does this pair tell you ? - EUR / USD 1.2302 - ANSWER-that one euro is worth 1.2302 us dollars. describe a micro lot - ANSWER-They are the smallest trading size, they = 1,000 units of currency, their volume(trading size) is 0.01 and they are worth 10p. 10 pips = £1.00 with a micro lot. describe a mini lot - ANSWER-They are 10x the micro lot, they = 10,000 units od currency, their volume(trading size) = 0.1 and they are worth £1.00. 10 pips = £10.00 with a mini lot. describe a standard lot - ANSWER-They are the original and largest trading size, they = 100,000 units of currency, their volume (trading size) = 1.0 and they are worth £10. 10 pips = £100 with a standard lot.