Forex Basics Quiz
Forex Basics Quiz
Congratulations on reaching the end of Module 1! You have learned the mechanics of the market, how to read quotes, calculate pips, understand leverage, and place orders.
You must score at least 70% to pass and unlock Module 2. Take your time, read each question carefully, and good luck!
1. The Forex market is a decentralized market. What does this mean?
a) It has no physical location and operates electronically via a network of banks.
b) It is regulated by a single global central exchange.
c) It only operates in countries without a central bank.
2. According to recent estimates, what is the approximate daily trading volume of Forex?
a) $1.5 Trillion
b) $7.5 Trillion
c) $9.5 Trillion
3. What event in 1971 shaped the modern Forex market?
a) The introduction of the Euro
b) The Nixon Shock / Collapse of Bretton Woods
c) The Great Depression
4. Under the Bretton Woods system, what was the US Dollar pegged to?
a) The British Pound
b) Silver
c) Gold ($35 per ounce)
5. If you believe the Base Currency will strengthen against the Quote Currency, what do you do?
a) Sell the pair (Go Short)
b) Buy the pair (Go Long)
c) Wait for a margin call
6. Who controls the largest share (~52%) of the daily Forex volume?
a) Retail Traders
b) Interbank Commercial Banks
c) Central Banks
7. Which trading session overlap is considered the “Golden Window” of Forex?
a) Tokyo / London Overlap
b) Sydney / Tokyo Overlap
c) London / New York Overlap
8. What time does the official Forex trading day end and swap fees apply?
a) 5:00 PM EST
b) 12:00 PM EST
c) 9:00 AM EST
9. Which of the following is a Minor (Cross) currency pair?
a) EUR/USD
b) USD/JPY
c) EUR/GBP
10. On a Forex platform, what does the ticker XAU/USD represent?
a) Platinum vs US Dollar
b) Gold vs US Dollar
c) Silver vs US Dollar
11. In the pair GBP/JPY, which currency is the Base Currency?
a) JPY (Japanese Yen)
b) GBP (British Pound)
c) Both are Base currencies
12. If EUR/USD moves from 1.0850 to 1.0900, what happened?
a) The Euro weakened against the Dollar.
b) The Euro strengthened against the Dollar.
c) The Dollar strengthened against the Euro.
13. Which price does the broker use when you click “BUY”?
a) The Bid Price
b) The Ask Price
c) The Spread Price
14. How is the Spread calculated?
a) Bid Price – Ask Price
b) Ask Price – Bid Price
c) Ask Price + Bid Price
15. For standard currency pairs (like EUR/USD), at which decimal place is the Pip located?
a) The 2nd decimal place
b) The 4th decimal place
c) The 5th decimal place
16. What is a “Pipette”?
a) 1/10th of a Pip (a fractional pip)
b) 10 full Pips
c) A type of market order
17. How many units of currency are in one Standard Lot?
a) 10,000 units
b) 100,000 units
c) 1,000 units
18. If you trade 1 Standard Lot of EUR/USD, what is the approximate pip value?
a) $1 per pip
b) $0.10 per pip
c) $10 per pip
19. If your account has 100:1 leverage, what is your required margin percentage?
a) 1%
b) 10%
c) 100%
20. What occurs when your account equity falls below the required margin percentage?
a) A Margin Call
b) A Stop-Out
c) A Swap Fee
21. What is a Stop-Out Level?
a) The broker automatically closes your positions to prevent a negative balance.
b) A pending order placed below current price.
c) The fee charged for holding trades overnight.
22. “Going Short” in Forex means:
a) Buying a currency pair expecting it to rise.
b) Selling a currency pair expecting it to fall.
c) Closing a trade within 1 minute.
23. Where is a Buy Limit order placed?
a) Above the current market price (Breakout)
b) Below the current market price (Reversal)
c) Exactly at the current market price
24. Which order type executes instantly at the best available current price?
a) Stop Order
b) Limit Order
c) Market Order
25. Why do brokers widen spreads during high-impact news events?
a) To encourage more trading volume
b) To protect themselves against rapid price spikes and volatility
c) Because the market is closed
26. On which night of the week are “Triple Swap” fees charged to cover the weekend?
a) Friday Night
b) Wednesday Night
c) Sunday Night
27. What determines whether you pay or earn a Swap fee?
a) The interest rate differential between the two currencies
b) The size of your spread
c) Your account leverage
28. Which broker type takes the opposite side of your trade, creating a potential conflict of interest?
a) ECN Broker
b) STP Broker
c) Market Maker (Dealing Desk)
29. Why do many traders fail when transitioning from a Demo account to a Live account?
a) Demo accounts have different price charts.
b) Real financial risk triggers emotional responses like fear and greed.
c) You cannot use technical analysis on live accounts.
30. If you deposit $10 into a Cent Account, what balance will be displayed in your MetaTrader terminal?
a) $1,000
b) 1,000 Cents
c) $100