Ladies and gentlemen...
drumroll, please...
the answers to "the test"!

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ANSWERS:

1. B

2. D

3. A - [WHY? - because without capital to trade with then trading activities can obviously be severly hampered; also because a trader is more likely to make a costly mistake as a "beginning" trader as opposed to an experienced trader, therefore it is imperitive to preserve your capital and make that a high priority as a novice]

4. D

5. D

6. False

7. False

8. Hit yourself if you don't know this one! Seriously!

9. D

10. A

11. A

12. A

13. D [and C]

14. B - [EQUITY: includes checking your reward-to-risk ratio and being comfortable with it; knowing exactly how much money you are risking with this trade and being comfortable and unemotional about it; being comfortable with the amount of capital it will require to get into this position in relation to the amount of your overal capital account size; asking yourself if you are completely and emotionally comfortable with the finances of the trade...including the potential reward]

15. Establish the Trend (up or down);
Wholesale or Retail;
Near the 20/13 MA area;
Small entry/indicator candlestick

16. C

17. A

18. $125.57/$125.77

19. $123.74 (using a twenty-cent "buffer" instead of ten-cents due to the high price of the stock)

20. Entry price [minus] the stop-loss price [multiplied by the number of shares]: $163.00



BONUS QUESTION: Be very careful answering this one!!

Created by M.J. Kleinhenz -- KayLine Strategies, L.L.c. -- 2003