Forex Final Exam

This exam has 30 questions covering the whole course: basics, technical analysis, fundamental analysis, risk and psychology, and expert topics. You need 80% (24 correct) to pass. Your best score is saved in this browser.

Before you start: Keep a calculator and the Cheat Sheet nearby if you like. Assume a USD account, standard lots of 100,000 units, and a pip value of $10 per standard lot on pairs quoted in USD unless the question says otherwise. Each answer is locked once chosen, and an explanation appears straight away.

Final Exam: 30 Questions

1. In the pair EUR/USD, which currency is the base currency?

  1. USD
  2. EUR
  3. Both equally
The first currency is the base (EUR). The price shows how many US dollars one euro costs.

2. GBP/USD rises from 1.2700 to 1.2765. How many pips is that?

  1. 6.5 pips
  2. 65 pips
  3. 650 pips
  4. 0.65 pips
1.2765 − 1.2700 = 0.0065. 0.0065 ÷ 0.0001 = 65 pips.

3. USD/JPY moves from 150.00 to 150.42. How many pips is that?

  1. 4.2 pips
  2. 420 pips
  3. 42 pips
For JPY pairs one pip is 0.01. 0.42 ÷ 0.01 = 42 pips.

4. You trade 0.30 lots of EUR/USD. What is each pip worth?

  1. $3.00
  2. $30.00
  3. $0.30
A standard lot is $10 per pip. 0.30 × $10 = $3.00 per pip.

5. What is the pip value of 1 standard lot of USD/JPY when the price is 150.00?

  1. $10.00
  2. $6.67
  3. $15.00
  4. $1.50
Pip value = 100,000 × 0.01 ÷ 150.00 = ¥1,000 ÷ 150 = $6.67.

6. How much margin is needed to open 1 standard lot of EUR/USD at 1.0850 with 1:30 leverage?

  1. $1,085
  2. $36,167
  3. $108,500
  4. $3,617
Position value = 100,000 × 1.0850 = $108,500. $108,500 ÷ 30 = $3,616.67 ≈ $3,617.

7. You want to buy EUR/USD only if it pulls back to support below the current price. Which order do you use?

  1. Buy stop
  2. Sell limit
  3. Buy limit
A buy limit is placed below the current price. A buy stop is placed above it (for breakouts).

8. Which period usually has the highest forex trading volume?

  1. The London–New York overlap
  2. The Sydney–Tokyo overlap
  3. Friday evening after New York closes
When London and New York are both open, liquidity is highest and spreads are tightest.

9. What is the maximum leverage for retail traders on major pairs in the UK and EU?

  1. 1:500
  2. 1:50
  3. 1:30
  4. 1:100
The FCA (UK) and ESMA rules (EU) cap major pairs at 1:30. In the US the CFTC/NFA cap is 1:50.

10. A hammer candle forms at support after a downtrend. What does it suggest?

  1. Sellers are firmly in control
  2. Sellers pushed price down but buyers rejected the low
  3. The market is closed
The long lower wick shows a rejection of lower prices. At support it is a possible bullish reversal signal, best confirmed by the next candle.

11. A strong resistance level breaks and price closes well above it. What does that old resistance often become?

  1. Support
  2. Stronger resistance
  3. Irrelevant
This is role reversal: broken resistance often acts as support on a retest.

12. RSI(14) reads 78. What is the classic reading?

  1. Oversold
  2. Neutral
  3. Overbought
RSI above 70 is classically overbought. In strong uptrends it can stay overbought for a long time, so it is not an automatic sell.

13. Which Fibonacci retracement level is called the "golden ratio"?

  1. 23.6%
  2. 38.2%
  3. 50.0%
  4. 61.8%
61.8% comes from the golden ratio (1 ÷ 1.618). 50% is popular but is not a Fibonacci ratio.

14. Price makes a higher high, but RSI makes a lower high. What is this?

  1. Bearish divergence
  2. Bullish divergence
  3. Trend confirmation
Rising price with falling momentum is bearish (regular) divergence. It warns that the uptrend may be weakening.

15. What is the MACD line?

  1. A 9-period SMA of price
  2. The 12 EMA minus the 26 EMA
  3. The average true range
The MACD line = 12 EMA − 26 EMA. The signal line is a 9-period EMA of the MACD line.

16. Bollinger Bands become very narrow (a "squeeze"). What does this usually mean?

  1. Volatility is low and a bigger move may follow
  2. Price must reverse immediately
  3. The trend is very strong
Narrow bands show low volatility. Quiet periods are often followed by expansion, but the squeeze does not tell you the direction.

17. A central bank unexpectedly raises interest rates. What usually happens to its currency?

  1. It weakens
  2. Nothing
  3. It tends to strengthen
Higher rates attract capital seeking yield, so the currency tends to strengthen, especially when the move is a surprise.

18. What is NFP?

  1. The eurozone inflation rate
  2. The US Non-Farm Payrolls jobs report, usually on the first Friday of the month
  3. A Japanese interest rate decision
Non-Farm Payrolls measures US job creation. It is one of the most volatile releases of the month.

19. A central bank governor sounds "hawkish". What does that mean?

  1. Leaning towards higher rates or tighter policy
  2. Leaning towards rate cuts
  3. Planning to stop publishing data
Hawkish = tighter policy / higher rates. Dovish = looser policy / lower rates.

20. Who publishes the weekly Commitments of Traders (COT) report?

  1. The ECB
  2. The FCA
  3. The IMF
  4. The CFTC
The US CFTC publishes the COT report every Friday, showing futures positioning as of the Tuesday before.

21. Account $5,000. You risk 2% with a 40-pip stop on EUR/USD. What position size?

  1. 0.25 lots
  2. 2.50 lots
  3. 0.50 lots
  4. 0.10 lots
Risk = 2% × $5,000 = $100. Size = $100 ÷ (40 pips × $10) = 0.25 lots.

22. Account $20,000. You risk 1% with a 50-pip stop on USD/JPY at 150.00 (pip value $6.67 per lot). What position size?

  1. 0.40 lots
  2. 0.60 lots
  3. 4.00 lots
Risk = $200. Size = $200 ÷ (50 × $6.67) ≈ $200 ÷ $333 = 0.60 lots.

23. You buy EUR/USD at 1.0850 with a stop at 1.0820 and a target at 1.0940. What is the risk:reward?

  1. 1:1
  2. 1:2
  3. 1:3
  4. 1:4
Risk = 30 pips, reward = 90 pips. 90 ÷ 30 = 3, so 1:3.

24. Your system uses a fixed 1:2 risk:reward. What win rate do you need just to break even (before costs)?

  1. 50%
  2. 25%
  3. 66.7%
  4. 33.3%
Break-even win rate = 1 ÷ (1 + R) = 1 ÷ 3 = 33.3%.

25. Your account falls 25%. What gain do you need to get back to where you started?

  1. 25%
  2. 33.3%
  3. 50%
  4. 20%
Recovery = D ÷ (1 − D) = 0.25 ÷ 0.75 = 33.3%. Losses get harder to recover as they grow.

26. Win rate 40%, average win $300, average loss $150. What is the expectancy per trade?

  1. +$30
  2. +$150
  3. −$30
  4. +$60
(0.40 × $300) − (0.60 × $150) = $120 − $90 = +$30 per trade. A low win rate can still be profitable.

27. You just hit your daily loss limit after two bad trades and feel angry. What should you do?

  1. Double your size to win it back quickly
  2. Switch to a different pair and keep trading
  3. Stop trading for the day and review the trades in your journal
Trying to win it back is revenge trading. A daily loss limit only works if you respect it. Stop, step away and review later with a calm mind.

28. In an uptrend of higher highs and higher lows, what is the first structural sign the trend may be ending?

  1. A new higher high
  2. Price breaks below the most recent higher low
  3. RSI rises above 50
Breaking the last higher low is a change of character in market structure. It does not guarantee a reversal, but the uptrend is no longer intact.

29. A strategy with many optimised settings looks perfect in a backtest but fails on new data. What is the best way to guard against this?

  1. Add more indicators until it works again
  2. Only backtest the best year
  3. Increase leverage
  4. Use fewer rules and test on out-of-sample data
This is overfitting. Simple rules, out-of-sample and walk-forward tests, and enough trades help show whether an edge is real.

30. A $100,000 prop challenge has a 5% max daily loss measured from each day's starting balance. Today starts at $102,000. What is the lowest equity allowed today?

  1. $95,000
  2. $97,000
  3. $96,900
  4. $98,000
5% × $102,000 = $5,100. $102,000 − $5,100 = $96,900. Always check how your firm defines the daily limit.

What Next?

Whether you passed or not, the exam is a checkpoint, not a finish line.

Warning: Passing a course does not make trading safe. Most retail CFD and forex accounts lose money. Only trade money you can afford to lose.