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What is the fundamental assumption in technical analysis that candlestick patterns heavily rely on?

Market volatility is predictable.

Economic indicators drive stock prices.

History tends to repeat itself.

Fundamental analysis is unreliable.

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How do candlestick patterns assist technical analysts in making trading decisions?

By predicting future economic events.

By identifying recurring price patterns.

By analyzing company financial statements.

By forecasting long-term market trends.

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What are the two main categories of candlestick patterns discussed in the text?

Bullish and bearish patterns

Simple and complex patterns

Single and multiple candlestick patterns

Reversal and continuation patterns

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According to the text, what color typically represents a bullish (strong) candle?

Red

Green

Black

Blue

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What is the recommended approach when encountering minor variations in candlestick patterns compared to their textbook definitions?

Disregard the pattern as invalid.

Strictly adhere to the textbook definition.

Be flexible within reasonable limits and quantify the variation.

Assume the pattern is a new, undiscovered type.