Trading Jobs Technical Analysis for Traders

Question 1

What does a 'golden cross' signal in technical analysis?

Accepted Answer

A short-term moving average crosses above a long-term moving average

Answer

A golden cross occurs when a short-term moving average (e.g., 50-day) crosses above a long-term moving average (e.g., 200-day), signaling a potential bullish trend.

Question 2

What does RSI stand for in technical analysis?

Accepted Answer

Relative Strength Index

Answer

RSI stands for Relative Strength Index, a momentum oscillator that measures the speed and magnitude of price changes on a scale of 0 to 100.

Question 3

In technical analysis, what does a 'head and shoulders' pattern typically signal?

Accepted Answer

A bearish reversal from an uptrend

Answer

A head and shoulders pattern — featuring a peak (left shoulder), a higher peak (head), and a lower peak (right shoulder) — signals a bearish reversal from an uptrend.

Question 4

What is a 'doji' candlestick pattern characterized by?

Accepted Answer

Open and close prices that are nearly equal, forming a small or no body

Answer

A doji forms when a security's open and close prices are virtually equal, resulting in a small or nonexistent body, signaling market indecision.

Question 5

In technical analysis, a support level is best described as a price point where:

Accepted Answer

Buying interest is strong enough to prevent the price from falling further

Answer

A support level is a price zone where buying demand is strong enough to prevent the price from declining further, acting as a 'floor' for price.

Trading Jobs Practice Test

Trading Jobs Practice Test

Trading Jobs Technical Analysis for Traders