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Last Updated: Jun 02, 2026
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1. Protective stops that are placed too far away can result in which of the following factors?
A) Unwanted liquidation
B) Small frequent elections
C) Large losses
D) Too many trades
2. _____________ captures an increasing part of the profits as price moves in a favorable direction.
A) Initial Stop
B) Standard deviation stop
C) Sell stop
D) Trailing stop
3. Which of the following is a general rule for trading futures?
A) The majority of capital should be committed to the strongest market since it is rare that more than two or more markets will experience a major move simultaneously
B) At least 50% of total equity should be dedicated to the market group with the strongest trend
C) Total amount risked on any single trade should not exceed 5% of equity
D) Due to the fact that markets only trend 30% of the time, 100% of capital should be invested at all times
4. Which of the following is a true statement according to Elliott Wave Theory?
A) Triangles are usually second waves preceding a longer third wave
B) In the stock market, wave 5 is the most common to extend
C) The Pythagorean theorem is the mathematical basis for Elliott Wave Theory
D) Waves can be expanded into longer waves and subdivided into shorter waves
5. Which of the following applies to the interpretation of point and figure charts in analyzing futures prices?
A) Futures prices offer a greater variety of chart formations than stocks
B) Only the most basic techniques are generally used such as a one box breakout
C) Pattern analysis is more complex than for stocks
D) Incorporating open interest data into a point and figure chart makes this type of chart more useful for futures
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: D | Question # 3 Answer: C | Question # 4 Answer: D | Question # 5 Answer: B |
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