Position sizing and stop loss Welcome to your Position sizing and stop loss Name Email 1. What is a stop loss? Automatic exit of a position when a trade doesn’t go your way Risk management tool that protects your profits A tool that stops a loss from happening All the above 2. Why should you have a stop loss on your trade? It’s impossible to predict where the market will go in the next minute To protect your account To minimize risks All the above 3. The act of setting the right amount of units of a currency pair to buy or sell is Scaling in Scaling out Position sizing Stop loss 4. The value of a currency pair is in the Base currency Conversion currency Counter currency None of the above 5. How do you set a stop loss for a buy or sell when trading forex? A few pips below the entry for a buy and above for a sell At the entry level At the support level At the next price close 6. Why is it always hard for many traders to set stop loss orders? Price is always chasing stop loss levels It is always hit out prematurely due to tight stops Always expect price to go to their favor therefore are only interested in target profits None of the above 7. Which of the following is the odd man out when calculating position size? Conversion currency pair exchange rate Currency pair you are trading Account balance Number of trades taken per day 8. Most of the traders have only focused on how much they can make out of a trade and have ended up placing their stops losses anyhow which puts their accounts to a greater risk. False True Not sure Some how 9. Which of the following is not among the four methods of setting stop loss? Volatility stop Percentage stop Time stop Chart tops and bottoms Liquidity stop 10. The common mistakes made by traders when setting stops are Setting stops that are too tight. Setting a stop too wide Placing your stops exactly on the levels of support and resistance All the above 11. The following are rules for setting stop loss levels Set stops that match the volatility of the market conditions you are trading. Close out failing trades when realized before reaching your stop loss levels. Do not widen your stop because a trade is going against you and about to hit your stop loss. All the above 12. Position size= (account size ×% risk per trade)/ (stop loss in pips × pip value) True False Not sure 13. Most traders make a mistake of trying to fit their stop loss to their desired position size instead of fitting their positions to their desired stop losses. False True Not sure 14. When your stop loss is hit your trade automatically closes Agree Disagree Not sure Time's up Related
