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Quiz: Trading and Analysis

Cryptocurrency trading can be difficult especially if you’re inexperienced with analysis methods. Test your knowledge with this crypto trading and analysis quiz.

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Question 1

Japanese candlesticks always represent a 1-day time interval.

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Although the default setting for candles is usually one day, there are lots of different time intervals that you can use. Lower timeframe intervals, such as the one minute, five minute, or 15-minute charts can be very effective for day trading. By contrast, higher intervals, such as the one day, one week, or one-month charts are more useful for long term trading strategies.

Question 2

TradingView is a powerful tool for...

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TradingView is a powerful charting platform that allows traders and investors to perform technical analysis for thousands of different assets like stocks and cryptocurrencies.

Question 3

The wick of a candle represents the high and low prices of an asset during a particular time interval.

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The top wick represents the highest price the asset traded at for that time interval. The bottom wick signifies the lowest price during that interval.

Question 4

A Head and Shoulder chart pattern is a...

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A head and shoulders pattern is a bearish reversal pattern meaning it is commonly used to predict an upcoming price reversal. This pattern includes 3 peaks. The outside peaks are known are the shoulders which are close in height and the middle peak (the head) is the highest peak.

Question 5

Fundamental analysis involves analysing charts to create predictions on future price movements...

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Fundamental analysis looks at finding an assets real or intrinsic value by assessing a range of metrics and factors like active addresses, use cases, project roadmap and competitors. Technical analysis on the other hand looks at statistics and charts to create predictions in future price movements.

Question 6

A crypto project that reserves a large percentage of tokens for founders and team members may be a risky investment.

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The token distribution model is an important factor to consider when looking at project tokenomics. A high percentage of the available tokens that is reserved for founders and team members may be risky due to market manipulation. These team members could sell all their holdings, causing the price to plummet.

Question 7

Market capitalization of a coin is...

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Market cap represents the entire value of a coin. The following is how it is calculated: Market cap = circulating supply x coin price

Question 8

Trading volume is important because it...

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Trading volume is an important technical analysis metric as it shows the amount of the token or coin was traded during a given period of time (typically within a day).

Question 9

A relative strength indicator (RSI) that falls below...is considered oversold and undersold if it rises above...

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RSI is an indicator that provides insight into whether a coin is overbought or oversold. An RSI ranges from 1 to 100 with scores below 30 indicating that the asset is oversold and scores above 70 indicating it is undersold.

Question 10

A crypto asset that is trading above its 20-day simple moving average (SMA) is considered to be in a...

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Simple moving average (SMA) shows the average closing price of an asset over a specific time period.

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