Intermediate Quiz: Risk & Reward

What is the risk-reward ratio in trading?

A stop-loss order is used to…

Which risk management strategy involves allocating only a fixed percentage of capital to a trade?

What is a common recommended risk-per-trade percentage for most traders?

What happens if your trade has a 1:3 risk-reward ratio and you win 50% of trades?

Which type of indicator follows price action and confirms trends?

Which indicator is used to measure market momentum?

Which indicator helps determine overbought or oversold conditions?

Which of these indicators is trend-following?

Bollinger Bands are primarily used to measure…

What does a trader achieve by using a trailing stop?

If a trader sets a stop-loss too tight, what is the likely outcome?

How can a trader hedge against losses?

A trader has a 60% win rate with a 1:2 risk-reward ratio. What is the expected outcome?

What is the primary purpose of drawdown analysis?

The MACD indicator helps traders identify…

A Golden Cross on a moving average chart is a signal for…

What does the Fibonacci retracement tool help traders identify?

What does the ATR (Average True Range) measure?

What is the significance of a divergence between price action and RSI?

A trader with a 40% win rate but a 1:4 risk-reward ratio is…

Which trading approach combines risk and reward efficiently?

Which of the following reduces overall trading risk?

What is the main advantage of using a risk-reward calculator?

What should traders do if their risk-reward ratio is negative?

A trader risks $100 per trade with a 1:3 risk reward. How much profit per successful trade?

Why do traders use risk percentages instead of fixed amounts?

What happens when a stop-loss is too wide?

What is a key feature of risk-adjusted returns?

A trader enters a trade with a stop-loss at 2% and take-profit at 6%. What’s the risk-reward ratio?