Part 4 · Practise and review

14Can you explain the plan?

Eight questions to test your understanding.

1.How many pips separate EUR/USD 1.1175 and 1.1200?
2.A buy fills at 1.1228. What are the fixed stop and target prices?
3.A sell fills at 1.1172. What are the fixed stop and target prices?
4.Price closes above SMA50, but the average is falling. Does the practice buy qualify?
5.Your $1,000 account uses a 0.25% ceiling. What is the cash budget?
6.Using the sizing assumptions in Chapter 9, does 0.01 lot fit that budget?
7.Why can a short stop trigger when a bid-only chart appears not to touch it?
8.Does a gross 1.67 reward-to-risk ratio establish profitability?

Score: 0 / 8

Honest note

Getting every answer right means you understand the rules, not that the rules work.

Key takeaway

If you can explain one valid buy, one valid sell and one no-trade condition without notes, you are ready for Stage 1.

Try it

Explain the plan out loud to someone else in under two minutes.

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