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Active Trading FAQs

  1. What happens if I cannot pay a margin call?

  2. How do I start using technical analysis?

  3. How does margin trading in the forex market work?

  4. What does it mean when there is "price action"?

  5. What are the rules for placing stop and limit orders in forex?

  6. I don't understand how a stock has a trading price of 5.97, but when I buy it I have to pay the asking price of 6.04. How can I be paying more than what the stock is trading for?

  7. Why can't I enter two sell orders on the same stock?

  8. Is there a buy-and-hold strategy in forex, or is the only way to make money by trading?

  9. How much money do I need to start trading?

  10. Does a shareholder lose all of their equity once a Chapter 11 bankruptcy is filed by the company?

  11. What is the difference between an options contract and a futures contract?

  12. If I buy a stock at $45 and I put a stop limit in to sell at $40, will I be guaranteed a sell once the stock has reached this price?

  13. Why is Game Theory useful in business?

  14. Do stimulus checks work?

  15. What is the McGinley Dynamic?

  16. What's the difference between consumer confidence and consumer sentiment?

  17. Do stocks that trade with a large daily volume generally have less volatility?

  18. When holding an option through expiration date, are you automatically paid any profits, or do you have to sell the option and pay commissions?

  19. How do I use the Nova/Ursa ratio?

  20. How do I employ a cash-and-carry trade?

  21. What does "gather in the stops" mean?

  22. What happens to a stop order after a stock splits?

  23. What is high-frequency trading?

  24. A Straddle

  25. What is "hammering"?

  26. Given the below information, all of the following statements are FALSE regarding this existing margin account EXCEPT:

  27. What is the Coppock curve?

  28. What is the difference between return on equity and return on capital?

  29. A customer has the following in his long margin account. Market value: $18,000, debit balance: $10,000 and SMA: $2,000. How much of the SMA may be used to purchase additional securities?

  30. How do I use a premium put convertible?

  31. What is the cheapest, fastest way to research, buy and trade stock?

  32. My brokerage firm won't allow naked option positions. What does this mean?

  33. How does a stop-loss order work, and what price is used to trigger the order?

  34. What is the best time of the day to trade?

  35. How can a futures trader exit a position prior to expiration?

  36. What does it mean to have "dry powder"?

  37. Why do option volume quotes differ on different websites?

  38. How can a company trade more shares in one day than there are shares outstanding?

  39. What do the "BxA" numbers on my brokerage's trading screen mean?

  40. When does one sell a put option, and when does one sell a call option?

  41. What is relative strength?

  42. What do you call a candlestick with no shadows, and what does it mean?

  43. What do people mean when they say there is a "bubble" going on in the market, such as a "housing bubble" or a "technology bubble"?

  44. What does negative shareholder equity on a balance sheet mean?

  45. What do the phrases "sell to open", "buy to close", "buy to open", and "sell to close" mean?

  46. Can technical analysis be called a self-fulfilling prophecy?

  47. What is the difference between a logarithmic price scale and a linear one?

  48. Where do I place my target when the price of a stock breaks out of a technical chart pattern?

  49. What do the numbers that follow the bid and ask numbers in stock quotes represent?

  50. Who or what are the turtles?

  51. How can I tell if I'm an emotional investor?

  52. What is the chaos theory?

  53. What's the difference between a stop and a limit order?

  54. What is Fibonacci retracement, and where do the ratios that are used come from?

  55. What methods can be used to measure and profit from investor sentiment?

  56. What is the put-call ratio and why should I pay attention to it?

  57. Why do futures' prices converge upon spot prices during the delivery month?

  58. Why does a crisis in emerging markets cause U.S. Treasury yields to decrease?

  59. What are elves?

  60. How do investors "chase the market"? It this a bad thing?

  61. What is a margin account?

  62. What does it mean to use technical divergence in trading?

  63. What is the pitchfork indicator that I keep hearing about, and how do I use it?

  64. I want to buy a stock at $30, sell when it reaches $35, don't want to hang on to it if it dips below $27, and I want to do all this in one trading order. What type of order should I use?

  65. Why would my stock's value decline despite good news being released?

  66. Do noise traders have any long-term effect on stock prices?

  67. What do the different colored candlesticks mean?

  68. How do I use a "basket" option?

  69. What's the difference between a mutual fund and a hedge fund?

  70. What's the difference between a straddle and a strangle?

  71. Short selling vs. purchasing a put option: how do the payoffs differ?

  72. Would a slow stochastic be effective in day trading?

  73. How does leverage work in the forex market?

  74. What does "buy on the cannons, sell on the trumpets" mean?

  75. Can you place a stop-loss order on a mutual fund?

  76. What is the difference between options and futures?

  77. How can I hedge against rising diesel prices?

  78. What is the difference between a quote driven market and an order driven one?

  79. What is the difference between leverage and margin?

  80. Is it possible to buy mutual funds using a margin account?

  81. What qualifies a person as a day trader?

  82. Is technical analysis used only to analyze stocks?

  83. I placed a limit order to buy a stock after the market closed, but the stock's price gapped above the entry price and my order never got filled. How can I prevent this from happening?

  84. What is the haircut rate imposed by clearing corporations?

  85. What do the bracketed numbers following a technical indicator mean?

  86. At what point in the ordering process does a broker charge commission?

  87. What is a gatekeeper?

  88. Use the following information about a customer’s margin account to answer the question.

  89. What is the difference between fundamental and technical analysis?

  90. What is the difference between fast and slow stochastics in technical analysis?

  91. What technical tools can I use to measure momentum?

  92. How long does a stock that has done a reverse split keep the letter "D" at the end of its symbol?

  93. How does leverage affect pip value?

  94. What is a GTEM order?

  95. How is margin interest calculated?

  96. Who is Mr. Copper?

  97. Margin accounts are established to allow investors the ability to use leverage with their investments.

  98. Where did the bull and bear market get their names?

  99. What's the difference between a regular option and an exotic option?

  100. How are moving averages used in trading?

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Last Questions Asked:
  1.

    What happens if I cannot pay a margin call?

  2. How do I start using technical analysis?

  3. How does margin trading in the forex market work?

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