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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. If everyone is selling in a bear market, does your broker have to buy your shares from you? If so, won't he be losing his shirt?

  32. Why do you need a margin account to short sell stocks?

  33. What is the difference between a simple moving average and an exponential moving average?

  34. Why won't my broker allow me to sell one stock and buy another on the same day?

  35. Why do some stock quotes appear in bold print in the newspaper?

  36. Why do people say that September is the worst month for investing?

  37. What is the best method of analysis for forex trading?

  38. How does pyramiding work?

  39. Are we in a bull market or a bear market?

  40. Does the party loaning shares in a short sale transaction benefit in any way other than from the interest earned on the loan?

  41. Should I buy options that are in the money or out of the money?

  42. Is tracking error a significant measure for determining ex-post risk?

  43. What are the risks of having both high operating leverage and high financial leverage?

  44. How is the Parabolic SAR used in trading?

  45. Is scalping a viable forex trading strategy?

  46. What is a Bermuda swaption?

  47. What does "buy and hold" mean?

  48. What are the minimum margin requirements for a short sale account?

  49. Is finance an art or a science?

  50. I keep hearing about the 50-day, 100-day and 200-day moving averages. What do they mean, how do they differ from each other, and what causes them to act as support or resistance?

  51. Can an option have a negative strike price?

  52. What happens to my call options if the underlying company is bought out?

  53. What are managed futures?

  54. My broker just sold securities out of my account without my permission. Is this legal?

  55. In the forex market, how is the closing price of a currency pair determined?

  56. How do I measure option liquidity?

  57. Where can I find information about pre- and after-hours trading on the NYSE and the Nasdaq?

  58. How do speculators profit from options?

  59. How can I use market breadth to my advantage?

  60. What is late-day trading? Why is it any different from buying and selling stocks in the after-hours market?

  61. Why does my broker allow me to enter only day orders for short selling?

  62. Can I make money using put options when prices are going up?

  63. What does it mean when the shares in my account have been liquidated?

  64. How can I determine a stock's next resistance level or target price?

  65. Where do investors tend to put their money in a bear market?

  66. What is the "random walk theory" and what does it mean for investors?

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

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

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

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

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

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

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

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

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

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

  77. What is relative strength?

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

  79. 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"?

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

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

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

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

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

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

  86. Who or what are the turtles?

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

  88. What is the chaos theory?

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

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

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

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

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

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

  95. What are elves?

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

  97. What is a margin account?

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

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

  100. 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?

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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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