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Question 1

Which of the following point and figure trading techniques limits risk compared to more basic trading rules?

Options :

A :

Buy or sell as soon as a new column is created on the chart

B :

Close out your trade on the second reversal back in the direction of the original signal

C :

Take small consistent profits, but allow large, windfall profitable positions to run

D :

Buy or sell on pullbacks after initial trade signal

Answer: D

Question 2

Which of the following are true of the concepts of divergence and confirmation in technical analysis

Options :

A :

They are opposite concepts

B :

Confirmation has a valid technical interpretation but in the case of divergence, no valid conclusion can be drawn

C :

Confirmation indicates a likely change in trend since all technical indicators are in agreement

D :

Divergence indicates continuation in trend since different technical indicators do not agree

Answer: A

Question 3

The Sharpe Ratio is defined as?

Options :

A :

(expected return plus the risk free interest rate) divided by the standard deviation of returns

B :

(expected return minus the risk free interest rate) divided by the standard deviation of returns

C :

(expected return divided by the risk free interest rate) divided by the standard deviation of returns

D :

(expected return times the risk free interest rate) divided by the standard deviation of returns

Answer: B

Question 4

This chart type integrates volume directly into the price bar:

Options :

A :

Equivolume

B :

VWOP

C :

Renko

D :

Ichimoku Cloud

Answer: A

Question 5

The "Rising 3 Methods" candlestick pattern is: I. Bullish II. Bearish III. Long White Body followed by a series of smaller falling candles IV. Long Black Body followed by a series of smaller rising candles

Options :

A :

I & III

B :

I & IV

C :

II & III

D :

II & IV

Answer: A