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Questions and Answers
What is the definition of a 'liquidity grab' in trading?
What is the definition of a 'liquidity grab' in trading?
- 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.
What is the main difference between a 'swing trader' and a 'scalper'?
What is the main difference between a 'swing trader' and a 'scalper'?
- 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.
What is the definition of 'mitigation' in trading?
What is the definition of 'mitigation' in trading?
- 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.
