MCQs on Oscillators and Indicators (RSI, MACD, Stochastic)
1. What does RSI stand for in technical analysis?
A) Relative Strength Indicator
B) Random Strength Index
C) Relative Speed Indicator
D) Real-time Strength Indicator
Answer: A) Relative Strength Indicator
2. What is the primary purpose of the RSI?
A) To predict future prices
B) To measure the speed and change of price movements
C) To identify trends in the market
D) To calculate moving averages
Answer: B) To measure the speed and change of price movements
3. Which values does the RSI range between?
A) 0 to 50
B) 0 to 100
C) -100 to 100
D) -50 to 50
Answer: B) 0 to 100
4. An RSI value above 70 generally indicates:
A) An oversold condition
B) A neutral condition
C) An overbought condition
D) A trend reversal
Answer: C) An overbought condition
5. What does MACD stand for?
A) Moving Average Convergence Divergence
B) Market Average Convergence Divergence
C) Moving Average Calculation Data
D) Market Average Calculation Divergence
Answer: A) Moving Average Convergence Divergence
6. Which two moving averages are used in the MACD calculation?
A) 50-day and 100-day
B) 20-day and 200-day
C) 12-day and 26-day
D) 5-day and 10-day
Answer: C) 12-day and 26-day
7. What does it mean when the MACD line crosses above the signal line?
A) A sell signal
B) A buy signal
C) No significance
D) A confirmation of trend
Answer: B) A buy signal
8. The Stochastic Oscillator compares a particular closing price to:
A) The highest high and lowest low over a set period
B) The average price of the asset
C) The moving averages of the asset
D) The volume of trades
Answer: A) The highest high and lowest low over a set period
9. The Stochastic Oscillator ranges between:
A) 0 to 50
B) 0 to 100
C) -100 to 100
D) -50 to 50
Answer: B) 0 to 100
10. A Stochastic value above 80 typically indicates:
A) An oversold condition
B) A trend reversal
C) An overbought condition
D) A stable market
Answer: C) An overbought condition
11. Which oscillator is known for providing both trend direction and potential reversal points?
A) RSI
B) MACD
C) Stochastic
D) All of the above
Answer: D) All of the above
12. Which indicator is best for identifying the momentum of a price movement?
A) RSI
B) MACD
C) Stochastic
D) All of the above
Answer: D) All of the above
13. When should traders be cautious if using the RSI?
A) When RSI is below 30
B) When RSI is above 70
C) When RSI is exactly at 50
D) When RSI is fluctuating
Answer: B) When RSI is above 70
14. What does a negative MACD value indicate?
A) A bullish trend
B) A bearish trend
C) A sideways trend
D) No significance
Answer: B) A bearish trend
15. How can oscillators be best utilized in trading?
A) As the sole basis for trading decisions
B) In conjunction with other indicators and price analysis
C) To completely predict market movements
D) To confirm economic reports
Answer: B) In conjunction with other indicators and price analysis