trading 101 definition Exam Question &
Answers 2025
Alpha stock: - CORRECT ANSWERS ✔✔a Stock in Play, a stock that is
moving independently of both the overall market and its sector, the
market is not able to control it, these are the stocks day traders look
for.
Ask - CORRECT ANSWERS ✔✔the price sellers are demanding in
order to sell their stock, it's always higher than the bid price.
Average daily volume - CORRECT ANSWERS ✔✔the average number
of shares traded each day in a particular stock, I don't trade stocks with
an average daily volume of less than 500,000 shares, as a day trader
you need sufficient liquidity to be able to get in and out of the stock
without difficulty.
Average relative volume: - CORRECT ANSWERS ✔✔how much of the
stock is trading compared to its normal volume, I don't trade in stocks
with an average relative volume of less than 1.5, which means the stock
is trading at least 1.5 times its normal daily volume.
Average True Range/ATR: - CORRECT ANSWERS ✔✔how large of a
range in price a particular stock has on average each day, I look for an
ATR of at least 50 cents, which means the price of the stock will move
at least 50 cents most days.
,trading 101 definition Exam Question &
Answers 2025
Averaging down: - CORRECT ANSWERS ✔✔adding more shares to
your losing position in order to lower the average cost of your position,
with the hope of selling it at breakeven in the next rally in your favor, as
a day trader, don't do it, do not average down, ever, a full explanation
is provided in this book, to be a successful day trader you must avoid
the urge to average down.
Bear: - CORRECT ANSWERS ✔✔a seller or short seller of stock, if you
hear the market is bear it means the entire stock market is losing value
because the sellers or short sellers are selling their stocks, in other
words, the sellers are in control.
Bearish candlestick - CORRECT ANSWERS ✔✔a candlestick with a big
filled body demonstrating that the open was at a high and the close was
at a low, it tells you that the sellers are in control of the price and it is
not a good time to buy, Figure 6.1 includes an image of a bearish
candlestick.
Bid - CORRECT ANSWERS ✔✔the price people are willing to pay to
purchase a stock at a particular time, it's always lower than the ask
price.
Bid-ask spread: - CORRECT ANSWERS ✔✔the difference between
what people are willing to pay to purchase a particular stock and what
other people are demanding in order to sell that stock at any given
moment, it can change throughout the trading day
, trading 101 definition Exam Question &
Answers 2025
Black box: - CORRECT ANSWERS ✔✔the top secret hidden computer
programs, formulas and systems that large Wall Street firms use to
manipulate the stock market.
Broker - CORRECT ANSWERS ✔✔the company who buys and sells
stocks for you at the Exchange. For day trading, because you require
fast order execution, you really must use what is called a direct-access
broker. Conventional online brokers, also known as full-service brokers,
provide considerable more investment advice, tax tips, retirement
planning and such, but generally do not offer the necessary fast order
execution, and are therefore more suited for investors and retail swing
traders.
Bull - CORRECT ANSWERS ✔✔a buyer of stock, if you hear the
market is bull it means the entire stock market is gaining value because
the buyers are purchasing stocks, in other words, the buyers are in
control.
Bull Flag - CORRECT ANSWERS ✔✔a type of candlestick pattern that
resembles a flag on a pole, you will see several large candles going up
(like a pole) and a series of small candles moving sideways (like a flag),
which day traders call consolidating, you will usually miss the first Bull
Flag but your scanner will alert you to it and you can then be ready for
the second Bull Flag, you can see an example of a Bull Flag formation in
Figure 7.3.
Answers 2025
Alpha stock: - CORRECT ANSWERS ✔✔a Stock in Play, a stock that is
moving independently of both the overall market and its sector, the
market is not able to control it, these are the stocks day traders look
for.
Ask - CORRECT ANSWERS ✔✔the price sellers are demanding in
order to sell their stock, it's always higher than the bid price.
Average daily volume - CORRECT ANSWERS ✔✔the average number
of shares traded each day in a particular stock, I don't trade stocks with
an average daily volume of less than 500,000 shares, as a day trader
you need sufficient liquidity to be able to get in and out of the stock
without difficulty.
Average relative volume: - CORRECT ANSWERS ✔✔how much of the
stock is trading compared to its normal volume, I don't trade in stocks
with an average relative volume of less than 1.5, which means the stock
is trading at least 1.5 times its normal daily volume.
Average True Range/ATR: - CORRECT ANSWERS ✔✔how large of a
range in price a particular stock has on average each day, I look for an
ATR of at least 50 cents, which means the price of the stock will move
at least 50 cents most days.
,trading 101 definition Exam Question &
Answers 2025
Averaging down: - CORRECT ANSWERS ✔✔adding more shares to
your losing position in order to lower the average cost of your position,
with the hope of selling it at breakeven in the next rally in your favor, as
a day trader, don't do it, do not average down, ever, a full explanation
is provided in this book, to be a successful day trader you must avoid
the urge to average down.
Bear: - CORRECT ANSWERS ✔✔a seller or short seller of stock, if you
hear the market is bear it means the entire stock market is losing value
because the sellers or short sellers are selling their stocks, in other
words, the sellers are in control.
Bearish candlestick - CORRECT ANSWERS ✔✔a candlestick with a big
filled body demonstrating that the open was at a high and the close was
at a low, it tells you that the sellers are in control of the price and it is
not a good time to buy, Figure 6.1 includes an image of a bearish
candlestick.
Bid - CORRECT ANSWERS ✔✔the price people are willing to pay to
purchase a stock at a particular time, it's always lower than the ask
price.
Bid-ask spread: - CORRECT ANSWERS ✔✔the difference between
what people are willing to pay to purchase a particular stock and what
other people are demanding in order to sell that stock at any given
moment, it can change throughout the trading day
, trading 101 definition Exam Question &
Answers 2025
Black box: - CORRECT ANSWERS ✔✔the top secret hidden computer
programs, formulas and systems that large Wall Street firms use to
manipulate the stock market.
Broker - CORRECT ANSWERS ✔✔the company who buys and sells
stocks for you at the Exchange. For day trading, because you require
fast order execution, you really must use what is called a direct-access
broker. Conventional online brokers, also known as full-service brokers,
provide considerable more investment advice, tax tips, retirement
planning and such, but generally do not offer the necessary fast order
execution, and are therefore more suited for investors and retail swing
traders.
Bull - CORRECT ANSWERS ✔✔a buyer of stock, if you hear the
market is bull it means the entire stock market is gaining value because
the buyers are purchasing stocks, in other words, the buyers are in
control.
Bull Flag - CORRECT ANSWERS ✔✔a type of candlestick pattern that
resembles a flag on a pole, you will see several large candles going up
(like a pole) and a series of small candles moving sideways (like a flag),
which day traders call consolidating, you will usually miss the first Bull
Flag but your scanner will alert you to it and you can then be ready for
the second Bull Flag, you can see an example of a Bull Flag formation in
Figure 7.3.
