Strategies Flashcards
7 cards from real Binary Trading practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Strategies flashcards as text
In a news-trading strategy, what should a trader review before an economic release?
Answer: The economic calendar and forecast vs. previous values
Knowing forecast versus prior figures helps anticipate whether the actual result will move price.
How does the moving-average crossover strategy generate a CALL signal?
Answer: A shorter MA crosses above a longer MA
When the faster moving average crosses above the slower one, it signals bullish momentum for a CALL.
What does an RSI reading above 70 typically suggest for a binary trade?
Answer: The asset may be overbought and due for a downward move
An RSI above 70 indicates overbought conditions, often preceding a price pullback.
In a support and resistance strategy, where would a trader most likely place a CALL?
Answer: When price bounces off a strong support level
A bounce off support suggests buyers are stepping in, favoring an upward CALL trade.
What is the main goal of a money-management strategy in binary trading?
Answer: To limit risk per trade to a small percentage of capital
Sound money management caps the amount risked per trade, preserving capital over time.
The Bollinger Bands strategy signals a potential reversal when price does what?
Answer: Touches or pierces the outer band then turns back
Price touching an outer band often signals an overextension and possible reversion toward the mean.
Why is backtesting important before deploying a binary trading strategy live?
Answer: It shows how the strategy would have performed on historical data
Backtesting evaluates a strategy against past data to gauge its historical reliability before risking real money.