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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's the difference between a mutual fund and a hedge fund?

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

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

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

  35. How does leverage work in the forex market?

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

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

  38. What is the difference between options and futures?

  39. How can I hedge against rising diesel prices?

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

  41. What is the difference between leverage and margin?

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

  43. What qualifies a person as a day trader?

  44. Is technical analysis used only to analyze stocks?

  45. 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?

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

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

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

  49. What is a gatekeeper?

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

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

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

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

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

  55. How does leverage affect pip value?

  56. What is a GTEM order?

  57. How is margin interest calculated?

  58. Who is Mr. Copper?

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

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

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

  62. How are moving averages used in trading?

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

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

  65. What is a virtual trailing stop order (VTSO)?

  66. How do I calculate forex pivot points?

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

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

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

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

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

  72. Does a strong trend (ADX > = 40) cause an increase in volatility?

  73. What are the advantages of using a mini forex account for trading?

  74. 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?

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

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

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

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

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

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

  81. How does pyramiding work?

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

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

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

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

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

  87. How is the Parabolic SAR used in trading?

  88. Is scalping a viable forex trading strategy?

  89. What is a Bermuda swaption?

  90. What does "buy and hold" mean?

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

  92. Is finance an art or a science?

  93. 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?

  94. Can an option have a negative strike price?

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

  96. What are managed futures?

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

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

  99. How do I measure option liquidity?

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

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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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