Day Trading Technical Indicators 2

Question 1

VWAP stands for Volume Weighted Average Price. In day trading, it is most commonly used as:

Accepted Answer

An intraday benchmark for institutional order flow and trade quality

Answer

A long-term trend indicator spanning multiple weeks

Answer

A measure of after-hours trading volume

Answer

A substitute for the opening range breakout level

Question 2

The Stochastic Oscillator compares a security's closing price to its price range over a given period. A reading above 80 generally indicates:

Accepted Answer

The asset is in overbought territory

Answer

A strong downtrend is forming

Answer

Volume is unusually low

Answer

A gap-up opening is likely tomorrow

Question 3

What is the primary difference between a Simple Moving Average (SMA) and an Exponential Moving Average (EMA)?

Accepted Answer

EMA gives more weight to recent prices, making it more responsive to new data

Answer

SMA uses volume data; EMA uses only price data

Answer

SMA is used only for long-term investing; EMA is for day trading only

Answer

EMA is calculated weekly while SMA is calculated daily

Question 4

In technical analysis, what does 'Average True Range' (ATR) measure?

Accepted Answer

Market volatility by calculating average price range including gaps

Answer

The average volume of shares traded over a period

Answer

The ratio of up-days to down-days in a period

Answer

The percentage of stocks above their 50-day moving average

Question 5

A day trader uses the 9 EMA and 20 EMA. A bullish signal is triggered when:

Accepted Answer

The 9 EMA crosses above the 20 EMA

Answer

The 9 EMA crosses below the 20 EMA

Answer

Both EMAs are flat and horizontal

Answer

Price closes below both EMAs

Question 6

The On-Balance Volume (OBV) indicator is used to:

Accepted Answer

Measure cumulative buying and selling pressure using volume

Answer

Calculate intraday pivot points

Answer

Determine the average daily trading range

Answer

Identify candlestick reversal patterns