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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 a margin account?

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

  33. What qualifies a person as a day trader?

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

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

  36. How are the interest charges calculated on my margin account?

  37. 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?

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

  39. What does "buy and hold" mean?

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

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

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

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

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

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

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

  47. What is the difference between options and futures?

  48. Is technical analysis used only to analyze stocks?

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

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

  51. Can a stop-loss order be used to protect a short sale transaction?

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

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

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

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

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

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

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

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

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

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

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

  63. How can I hedge against rising diesel prices?

  64. 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?

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

  66. How are moving averages used in trading?

  67. What are the components of the risk premium for investments?

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

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

  70. Is finance an art or a science?

  71. How do I measure option liquidity?

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

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

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

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

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

  77. 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?

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

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

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

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

  82. How is spread calculated when trading in the forex market?

  83. Do stop or limit orders protect you against gaps in a stock's price?

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

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

  86. 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?

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

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

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

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

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

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

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

  94. How does leverage work in the forex market?

  95. What is the difference between leverage and margin?

  96. How does leverage affect pip value?

  97. I want to try short selling, but how can I sell something that I don't own?

  98. What methods can be used to fund a forex account?

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

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

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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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