Famous trading strategies quiz

Test yourself

One question from each lesson in this topic. Pick an answer to see why, then open the lesson if you want to review it.

1. Question 1 of 14

   All three bases form after an uptrend. In the drawing, which one is the sound cup with handle that O’Neil described?

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   ABC

2. Question 2 of 14

   In the drawing, both companies grew earnings every quarter. Which pattern fits the C in CAN SLIM best?

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   Either one, since every quarter shows growthThe decelerating panel, because it starts at +50%The accelerating panel, because growth speeds up each quarter

3. Question 3 of 14

   Three hypothetical stocks in uptrends each form a base. In the drawing, which base shows a volatility contraction pattern?

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   ABC

4. Question 4 of 14

   In the drawing, where is the pivot that a breakout must clear?

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   At the low of the first, deepest pullbackAt the top of the first pullback, where the base beganAt the top of the last, tightest contraction

5. Question 5 of 14

   In the drawing, a stock is climbing in a staircase of boxes. Which long entry follows the Darvas buy rule?

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   ABC

6. Question 6 of 14

   In the drawing, the stock has formed its third box. Where does the stop belong now?

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   Still under the bottom of the first box, where the trade startedJust under the bottom of the current boxJust above the top of the current box

7. Question 7 of 14

   Hypothetical: a stock has traded sideways for weeks under a prior high, its pivotal point. In the drawing, which panel shows what Livermore called a danger signal?

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   ABC

8. Question 8 of 14

   In the drawing, when is each add made, and what happens to the stop?

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   On each dip back toward the pivotal point, to lower the average cost; the stop stays putOnly after price has moved in favour, with the stop raised under each addAll at once on the breakout candle; the stop moves lower to give the trade room

9. Question 9 of 14

   In the drawing of an accumulation range, which point is the spring?

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   ABCD

10. Question 10 of 14

    In the distribution drawing, what does the UTAD mark?

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    A poke above the range high that fails and closes back inside the rangeThe first heavy selling after the long riseThe break below the range low on heavier volume

11. Question 11 of 14

    Each panel has a dashed 30-week moving average. Which panel shows stage 2, the only stage where Weinstein buys?

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    ABCD

12. Question 12 of 14

    In the drawing, one price path runs through all four stages. Where does Weinstein’s method look for a new buy?

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    In stage 4, once the price looks cheapIn stage 1, while the average is still flatIn the shaded buy zone at the start of stage 2In stage 3, after the long advance

13. Question 13 of 14

    In the drawing, the stop sits 2N below the entry, yet the trade ends where price falls through the 10-day low. Why does System 1 exit there instead of at a fixed profit target?

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    Because the 10-day low is always closer than the 2N stopBecause a fixed target would cut short the few big trends that pay for the many small lossesBecause the rules did not allow stops

14. Question 14 of 14

    In the drawing, the account is 100,000 and N = 2.00, so one unit is 500 shares. If only the first unit is bought and its 2N stop is hit, how much is lost?

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    $500$1,000$2,000