Trading Jobs Day Trading Strategy 2

Question 1

In a momentum breakout strategy, what confirms a valid breakout above resistance?

Accepted Answer

A surge in trading volume on the breakout candle

Answer

A drop in volume as price rises

Answer

A narrowing of the bid-ask spread only

Answer

The breakout occurring at the market close

Question 2

What is a 'false breakout' in day trading?

Accepted Answer

Price breaks a level then quickly reverses back inside the range

Answer

A breakout that happens overnight

Answer

A breakout confirmed by three indicators

Answer

Any breakout on low volatility days

Question 3

Which strategy aims to profit from price bouncing between established support and resistance?

Accepted Answer

Range trading

Answer

Trend following

Answer

Scalping news spikes

Answer

Gap-and-go

Question 4

In a 'gap-and-go' strategy, traders look to enter when a stock gaps up and then does what?

Accepted Answer

Continues higher after holding above the opening range

Answer

Immediately fills the gap downward

Answer

Trades flat for the first hour

Answer

Reverses on the first red candle

Question 5

What does a 'pullback' entry strategy involve?

Accepted Answer

Buying a temporary dip within an established uptrend

Answer

Shorting at new all-time highs

Answer

Entering only at the open

Answer

Averaging down on losing positions

Question 6

Which moving average is most responsive to recent price action, making it popular for day traders?

Accepted Answer

Exponential moving average (EMA)

Answer

Simple moving average (SMA)

Answer

Weighted yearly average

Answer

200-day SMA

Question 7

What is the purpose of identifying the 'opening range' in the first 15-30 minutes?

Accepted Answer

To set high/low levels that act as breakout or breakdown triggers

Answer

To guarantee a profit before lunch

Answer

To avoid all morning trading

Answer

To calculate dividend yields