Forex Trading Traits Quiz
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Questions and Answers

What is the primary purpose of trading in forex?

  • To exchange one currency for another simultaneously (correct)
  • To facilitate international trade and investment
  • To arbitrage pricing discrepancies across different markets
  • To speculate on the future value of currencies

    • What is a pip in the context of forex trading?

  • The commission charged by a broker for executing a trade
  • The leverage ratio used to increase trade exposure
  • The difference between the bid and ask prices
  • The minimum price movement of a currency pair (correct)

    • What is the spread in forex trading?

  • The difference between the bid and ask prices (correct)
  • The commission charged by a broker for executing a trade
  • The maximum loss a trader is willing to accept on a trade
  • The amount of leverage applied to a trade

    • What is the purpose of a position size calculator in forex trading?

    <p>To manage risk by limiting the exposure of a trade (C)</p> Signup and view all the answers

    What is the recommended risk management rule mentioned in the text?

    <p>Stop loss (pips) × Lot size &lt; 2% × Equity (A)</p> Signup and view all the answers

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