Stop loss order and stop limit order are commonly used by CFD traders in managing their risks in trading.
What is the primary purpose of using stop loss and stop limit orders in CFD trading?
A.To amplify losses
B.To automatically close a position at a certain price
C.To increase leverage
D.To initiate new trades
How does a stop limit order differ from a stop loss order?
A.Stop limit orders are used for buying, while stop loss orders are for selling.
B.Stop limit orders only trigger at market open, while stop loss orders trigger at any time.
C.Stop limit orders allow for better prices, while stop loss orders trigger at the specified price or worse.
D.Stop limit orders and stop loss orders are interchangeable terms.
Why might traders use technical analysis to determine stop-loss levels?
A.To maximize profits
B.To minimize transaction costs
C.To automate trading strategies
D.To identify key support and resistance levels
When you place a stop-limit order in CFD trading, what are the two specified prices?
A.Entry price and exit price
B.Limit price and market price
C.Stop price and limit price
D.Market price and stop price
If the market price gaps down below the limit price in a stop-limit sell order, what happens?
A.The order will be executed at the market price.
B.The order will not be executed at all.
C.The order will be executed at the stop price.
D.The order will be canceled automatically.
What factor determines whether a stop-limit order will be executed in CFD trading?
A.The order size
B.The willingness of a buyer or seller at the limit price or better
C.The market volatility
D.The entry price of the CFD
In CFD trading, when are the order trigger and execution at specified price levels expected to occur?
A.After opening a trading account
B.After deciding on a trading strategy
C.After entering the order details
D.After placing the order
Stop loss order and stop limit order are commonly used by CFD traders in managing their risks in trading.
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