Trading Jobs Forex Trader Training 2

Question 1

A forex pair quote of EUR/USD = 1.0850 means what?

Accepted Answer

1 euro buys 1.0850 US dollars

Answer

In a quote the base currency (EUR) equals the number of quote-currency (USD) units shown.

Question 2

If EUR/USD moves from 1.1000 to 1.1004, how many pips is that?

Accepted Answer

4 pips

Answer

For most pairs a pip is the fourth decimal place, so a 0.0004 move equals 4 pips.

Question 3

What does a trader's stop-loss order do?

Accepted Answer

Closes a position once losses reach a set level

Answer

A stop-loss automatically exits a trade at a predefined adverse price to cap losses.

Question 4

Leverage of 100:1 means a $1,000 margin controls how much position size?

Accepted Answer

$100,000

Answer

100:1 leverage lets each dollar of margin control 100 dollars of position value.

Question 5

Which session typically has the highest forex liquidity?

Accepted Answer

London–New York overlap

Answer

The London and New York session overlap concentrates the largest trading volume and tightest spreads.

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