Trading Terminology Quiz

A temporary reversal or retracement in the price of an asset within a larger trend.

A move in price that aims to trigger stop-loss orders or trap traders before continuing in the original direction. (correct)

A trading strategy that involves making short-term trades to profit from small price movements.

The ability to sustain and maintain a successful trading method or account over time.

A swing trader holds positions for an extended period of time, often weeks or months, while a scalper focuses on making trades within the same trading day.

A swing trader and a scalper are essentially the same thing.

A swing trader aims to capture larger price movements over a period of days or weeks, while a scalper aims to profit from small price movements in short timeframes. (correct)

A swing trader focuses on aligning their trades with the prevailing trend in the market, while a scalper makes short-term trades to profit from small price movements.

The ratio of potential profit to potential loss in a trade.

The presence of multiple indicators or factors supporting a particular trading decision or direction.

A temporary reaction or retracement that does not lead to a sustained change in the market direction. (correct)

A trading approach that aims to be cautious and prioritize winning trades over consistent losses.