Homework #7 HOMEWORK ALERT – Complete your homework before starting Class 8 Welcome to your ACTIVE - Day Trading Quiz: Chapter 7 Name Email 1. What does RSI stand for? Real Strength Index Reversal Stock Index Relative Stock Index Relative Strength Index2. If a stock sells off more than 10% in 5min what is a possibility? Bear Flag then continuation to the downside Bottom bounce scalp Circuit Breaker Halt All of the above3. If the airline sector is extremely strong what do you do when you see 4 airline stocks on the reversal scanner? Wait for the first one to give a reversal indicator then short it. Watch all 4 stocks and try to short each of them Watch the sector and when 2 or more start to reverse, short the strongest of the 4 setups. Forget about shorting, the sector is strong, go long.4. If the entire market is weak and there are lots of stocks on the reversal bottom bounce scanner how do you react? Take the best looking reversal setup on 5min confirmation Take the best looking reversal setup on the 5min setup but only if the market is ALSO bouncing Don’t take trades, the market is trending down and that means reversals won’t be strong. Go short and ride the momentum to the short side.5. Where do you set your stop on Reversal Trades? Stop at low of day Stop at the low of the last 5min candle Stop below the half dollar or whole dollar Any of the above, but whichever is a tighter stop6. When you see a reversal scanner alert what’s the first thing you do? Check the 5min chart to see how many consecutive red or green candles you have. Check the hourly chart Check the 15min chart Take a position with a 10 cent stop. Chapter 7 - Reversal Trading Strategies: Homework #7 Completing your homework is for your own benefit. Answers should be in Paragraph form. If you want to succeed as a trader, you have to show motivation & discipline. Name Email 1. What is a min number of consecutive red/green candles before taking a reversal trade?2. What is an ideal RSI for a reversal trade?3. What is the correct entry position on the 5min chart for a reversal? What is your stop? What is your profit target?4. What stock scanners will you be using to find reversal trades?5. How do you trade reversals when an entire sector, or even the entire market is experiencing an extreme? (big sell off, big squeeze)6. What is the biggest risk with trading reversals?7. Give an example of why you wouldn’t take a reversal trade.8. Please provide 3 examples of Reversal trades with entry, stop, exit, etc.