Free CTA Charting & Pattern Recognition Questions and Answers

Question 1

What does a line chart primarily display?

Accepted Answer

Closing prices over time

Answer

Open prices.

Answer

Trading volume.

Answer

Market capitalization.

Question 2

Which chart pattern signals a reversal from uptrend to downtrend?

Accepted Answer

Head and shoulders

Answer

Cup and handle.

Answer

Ascending triangle.

Answer

Bullish flag.

Question 3

What does a double bottom pattern suggest?

Accepted Answer

Reversal to an uptrend

Answer

Continuation of a downtrend.

Answer

Sideways market.

Answer

Consolidation phase.

Question 4

What is a characteristic of a bullish flag pattern?

Accepted Answer

Continuation of an uptrend

Answer

Price weakness.

Answer

Sudden market crash.

Answer

Flat price movement.

Question 5

What does a symmetrical triangle usually indicate?

Accepted Answer

Consolidation before breakout

Answer

Guaranteed upward breakout.

Answer

Definite downtrend.

Answer

Immediate price reversal.

Question 6

Which pattern is often associated with the continuation of a downtrend?

Accepted Answer

Bearish pennant

Answer

Bullish flag.

Answer

Ascending triangle.

Answer

Cup and handle.

Question 7

What is a resistance level?

Accepted Answer

A ceiling that limits upward movement

Answer

A floor below price action.

Answer

A moving average.

Answer

An earnings report indicator.

Question 8

Which type of chart uses boxes and Xs to represent price movement?

Accepted Answer

Point and figure chart

Answer

Bar chart.

Answer

Candlestick chart.

Answer

Line chart.

Question 9

What defines support in chart analysis?

Accepted Answer

Area where price tends to stop falling

Answer

Area above the price action.

Answer

Indicator of high volatility.

Answer

Momentum reversal point.