Risk and money management quiz

1. You lose 50% of your account. What gain gets you back to the start?

1. 150%
2. 25%
3. 50%
4. 100%

2. Why do careful traders focus first on keeping losses small?

1. Big losses need much bigger gains to recover
2. Small losses are against the rules
3. Big losses are easy to win back
4. Gains and losses are always equal

3. After a 10% loss, what gain gets you back to the start?

1. About 20%
2. Exactly 10%
3. About 9%
4. About 11.1%

4. What does 'stay in the game' mean for a trader?

1. Always use the biggest size
2. Keep enough money to keep trading and learning
3. Never take a loss at all
4. Trade every single day

5. An account of 10,000 loses 30%. How much is left?

1. 9,700
2. 7,000
3. 3,000
4. 13,000

6. After a 30% loss, about what gain do you need to recover?

1. 60%
2. 30%
3. 42.9%
4. 33%

7. After a loss, a trader takes one huge bet to win it all back. Why is that risky?

1. Another loss would dig a far deeper hole
2. It has no effect on the account
3. Huge bets always win
4. It makes losses smaller

8. After a 90% loss, what gain do you need to recover?

1. 900%
2. 90%
3. 100%
4. 190%

9. Starting at 10,000, one trader loses 5% on each of 5 bad trades and another loses 25% each time. About how much does each have left?

1. About 8,000 and about 5,000
2. 9,500 and 7,500
3. About 7,738 and about 2,373
4. 7,500 and nothing

10. A 10,000 account loses 20% and then gains 20%. Where does it end?

1. 8,000
2. 10,000
3. 9,600
4. 10,400

11. What is the risk in a trade plan?

1. The number of trades per day
2. The distance from entry to target
3. The distance from entry to stop
4. The size of the account

12. What is the reward in a trade plan?

1. The distance from entry to stop
2. The price of the last candle
3. The fee you pay
4. The distance from entry to target

13. You risk 10 to make 20. How is that written?

1. 1:1
2. 10:1
3. 1:2
4. 2:1

14. What does a 2R target mean?

1. The reward is twice the risk
2. The risk is twice the reward
3. You trade twice a day
4. The stop is 2 away

15. Entry 200, stop 190, target 220. What is the reward-to-risk ratio?

1. 1
2. 3
3. 0.5
4. 2

16. With a 1:2 plan, how many losses does one win pay for?

1. Two
2. One
3. Three
4. None

17. Why check a target against the chart?

1. Charts set the fees
2. It makes the stop smaller
3. A good ratio is useless if price is unlikely to reach the target
4. Targets must always be round numbers

18. Entry 50, stop 48, target 56. What R multiple is the target?

1. 2R
2. 3R
3. 4R
4. 1.5R

19. A plan risks 10 to make 20, but costs take 2 off every win and add 2 to every loss. What is the real ratio?

1. 2.5R
2. 1R
3. 2R
4. 1.5R

20. Entry 100, stop 95, and strong resistance sits at 104. What should a careful trader conclude about a 2R target at 110?

1. Move the stop to 99 so the ratio looks better
2. It sits beyond resistance, so the plan is weak
3. Double the size to make up for it
4. Ignore the resistance and keep 110

21. What does 'risk per trade' mean?

1. The money you lose if the stop is hit
2. The fee for each trade
3. The full value of the position
4. The money you hope to make

22. What is 1% of 1,00,000 rupees?

1. 10,000 rupees
2. 100 rupees
3. 1,000 rupees
4. 1,00,000 rupees

23. What is 1% of $10,000?

1. $1
2. $100
3. $10
4. $1,000

24. Why risk only a small slice on each trade?

1. Because small trades always win
2. So no single loss can knock you out
3. Because the law says so
4. So you never have a loss

25. What is 1% of ¥1,000,000?

1. ¥1,000
2. ¥100
3. ¥100,000
4. ¥10,000

26. Your balance falls from 1,00,000 to 90,000 rupees. What is 1% risk now?

1. 1,000 rupees
2. 9,000 rupees
3. 900 rupees
4. 90 rupees

27. You feel very sure about the next trade. What should happen to your risk?

1. Remove the stop
2. It stays at your fixed percentage
3. Risk the whole account
4. Double it

28. Starting from 1,00,000 rupees, you lose 1% ten times in a row. About how much is left?

1. About 90,438 rupees
2. Exactly 90,000 rupees
3. About 99,000 rupees
4. About 89,000 rupees

29. Starting from 1,00,000 rupees, you lose 10% ten times in a row. About how much is left?

1. About 50,000 rupees
2. About 90,000 rupees
3. About 34,868 rupees
4. Nothing

30. A 5,00,000 rupee position has its stop 0.2% below entry. How much does it risk?

1. 5,00,000 rupees
2. 10,000 rupees
3. 100 rupees
4. 1,000 rupees

31. What is the position-size formula?

1. Money at risk ÷ distance from entry to stop
2. Entry price ÷ target price
3. Balance × leverage
4. Number of trades × fees

32. You can lose 1,000 and the stop is 10 below entry. How many shares?

1. 10
2. 1,000
3. 10,000
4. 100

33. What happens to the position size when the stop is wider?

1. It gets bigger
2. It stays the same
3. It doubles
4. It gets smaller

34. Why round the size down rather than up?

1. Rounding down doubles the reward
2. Rounding up pushes the loss above your limit
3. Markets ban round numbers
4. It makes the stop tighter

35. Balance $10,000, 1% risk, entry $50.00, stop $48.50. How many whole shares?

1. 100
2. 66
3. 67
4. 200

36. You can lose ¥10,000, each share risks ¥40, and Tokyo stocks trade in 100-share units. What size can you trade?

1. 100 shares
2. 300 shares
3. 250 shares
4. 200 shares

37. Which order is right when planning a trade?

1. Pick the target, then skip the stop
2. Set the stop from the chart, then work out the size
3. Pick the size, then squeeze the stop to fit
4. Pick the leverage, then guess the size

38. Balance 2,00,000 rupees, 1% risk, entry 1,000, stop 975. How many shares?

1. 80
2. 25
3. 800
4. 200

39. You bought 66 shares with a stop $1.50 below entry. What is your real risk?

1. $66
2. $100
3. $99
4. $150

40. A trader wants 200 shares, so squeezes the stop to 5 below entry even though the chart says the idea fails 20 below. What is wrong?

1. Nothing, bigger size is always better
2. It removes all risk from the trade
3. The stop now sits inside normal wiggles and will likely be hit for no reason
4. The target is now too far

41. Wins and losses are the same size (1R). What win rate breaks even?

1. 50%
2. 25%
3. 33%
4. 70%

42. Wins are 3R and losses are 1R. What win rate breaks even?

1. 33%
2. 75%
3. 50%
4. 25%

43. What do bigger wins let you afford?

1. Skipping stops
2. Never checking results
3. Being wrong more often
4. Bigger losses than wins

44. Can a 70% win rate lose money?

1. Only with no stop
2. Only on weekends
3. Yes, if the losses are much bigger than the wins
4. No, never

45. What is the breakeven win rate formula, ignoring costs?

1. 1 − R
2. R ÷ 2
3. 1 ÷ (1 + R)
4. R × 100

46. Wins are 1.5R and losses 1R. What win rate breaks even?

1. 40%
2. 33%
3. 15%
4. 60%

47. How do fees and spread change the breakeven win rate?

1. They leave it the same
2. They raise it
3. They lower it
4. They make it zero

48. Trader A wins 70 of 100 trades at 0.3R and loses 30 at 1R. What is the total?

1. +9R
2. −9R
3. −30R
4. +21R

49. Trader B wins 40 of 100 trades at 2R and loses 60 at 1R. What is the total?

1. +80R
2. +20R
3. −20R
4. −60R

50. A method wins 30% of the time at 2R. Ignoring costs, does it make or lose money?

1. You cannot tell
2. It breaks exactly even
3. It makes money, because 2R is big
4. It loses, because 2R needs about 33.3% to break even

51. What is leverage?

1. The distance to your stop
2. The number of trades you make
3. The position's value divided by your deposit
4. The fee for each trade

52. What is margin?

1. The deposit needed to open a leveraged position
2. The profit on a trade
3. A type of chart pattern
4. The gap between two candles

53. At 10x leverage, a 1% price move changes your deposit by about how much?

1. 100%
2. 10%
3. 1%
4. 0.1%

54. What is liquidation?

1. The broker or exchange closing your position because the deposit is nearly gone
2. Moving your stop
3. Adding money to your account
4. Taking profit at your target

55. At 20x leverage, what move against you wipes out the deposit?

1. 10%
2. 20%
3. 5%
4. 2%

56. You deposit 500 at 10x leverage. How big is the position?

1. 50
2. 50,000
3. 500
4. 5,000

57. What is a margin call?

1. A reminder of trading hours
2. A bonus for good trades
3. A call to buy more shares
4. A request to add money because the deposit has fallen too low

58. At 100x leverage, what move against you wipes out the deposit?

1. 10%
2. 100%
3. 1%
4. 0.1%

59. Your balance is 10,000, you risk 1% and your stop is 2% from entry. What position value keeps the risk at 100, whatever the leverage?

1. 5,000
2. 50,000
3. 10,000
4. 2,000

60. You use 20x leverage with your stop 6% below entry. What happens on a 5.5% fall?

1. Nothing happens
2. The position is liquidated before the stop is reached
3. The stop fills first at 6%
4. The broker adds money for you

61. What is a drawdown?

1. The money you add to your account
2. The number of trades in a day
3. The profit on your best trade
4. The drop from the account's highest value to its lowest point before a new high

62. Do good trading plans have losing streaks?

1. No, never
2. Only if the plan is broken
3. Only on Mondays
4. Yes, even good plans have them

63. An account peaks at 10,000 and falls to 9,000. What is the drawdown?

1. 10%
2. 9%
3. 1%
4. 90%

64. What should you do after a normal losing streak?

1. Stop using stops
2. Double your risk
3. Keep the same risk and follow the plan
4. Switch methods every day

65. At a 50% win rate, how likely is a streak of 5 or more losses somewhere in 100 trades?

1. About 81%
2. About 100%
3. About 5%
4. About 50%

66. An account peaks at 10,800 and falls to 9,720. What is the drawdown?

1. 10%
2. 1,080%
3. 8%
4. 12%

67. Why size trades with your likely worst streak in mind?

1. So you can skip stops
2. So streaks never happen
3. So you can live through it calmly and keep following the plan
4. So every trade wins

68. You lose 7 trades in a row, risking 3% of the balance each time. About how big is the drawdown?

1. About 7%
2. About 19.2%
3. About 3%
4. Exactly 21%

69. At a 40% win rate, how likely is a streak of 7 or more losses somewhere in 100 trades?

1. About 40%
2. About 69%
3. About 99%
4. About 7%

70. After a losing streak a trader raises risk from 1% to 3% to win it back faster. What is the problem?

1. It makes the drawdown smaller
2. Nothing, bigger risk fixes streaks
3. It lowers the win rate to zero
4. The next normal streak cuts about three times deeper

71. What does a standard stop order become when it is triggered?

1. A limit order at the stop price
2. A cancelled order
3. A market order
4. A new position

72. What is slippage?

1. A fee for opening an account
2. The gap between the price you planned and the price you got
3. The distance to your target
4. A candle with a long wick

73. Is the stop price the worst loss you can take?

1. No, a gap can fill it at a worse price
2. Only for crypto
3. Yes, always
4. Only on Fridays

74. When is slippage most likely?

1. Only after you take profit
2. In the middle of a quiet day
3. Never on stocks
4. Around results, central bank decisions and weekends

75. You bought at 500 with a stop at 490, and the stock opens at 460. Where does the stop likely fill?

1. At 500
2. At 520
3. Near 460
4. Exactly 490

76. How can a trader allow for gap risk before a results announcement?

1. Remove the stop
2. Trade smaller or stay out
3. Move the stop further away and add size
4. Double the size

77. Why are thinly traded markets riskier for stops?

1. They never move
2. They have no prices
3. Stops are banned there
4. With few orders, price can jump past the stop

78. 100 shares, entry 500, stop 490, and the stock opens at 460. What is the actual loss?

1. 4,000
2. 460
3. 3,000
4. 1,000

79. Your loss limit is 1,000, and a results gap could open 40 below your entry. How many shares keep even a gap loss within the limit?

1. 25
2. 40
3. 100
4. 250

80. What is the main risk of a stop-limit order?

1. It always fills at a worse price
2. It may not fill at all if price jumps past the limit
3. It turns into a buy order
4. It costs double

81. What does correlation measure?

1. The size of a position
2. The fee on a trade
3. How fast one price moves
4. How closely two prices move together

82. A correlation of +1 means the two prices do what?

1. Have no link at all
2. Always move opposite
3. Always move together
4. Never move

83. A correlation of -1 means the two prices do what?

1. Always move together
2. Always move opposite
3. Move at random
4. Stay flat

84. Two trades in coins that move together are really closer to what?

1. Always a win
2. No risk at all
3. One bigger bet
4. Two fully separate risks

85. Three trades each risk 1%, and all three move together. What is the real risk?

1. Nothing
2. 1%
3. About 3%, as one bet
4. 0.33%

86. What tends to happen to correlations during a market sell-off?

1. They always fall to zero
2. They flip to -1
3. They stop existing
4. They often rise

87. Which pair is most likely a hidden double bet?

1. One trade and cash
2. Two banks in the same country
3. Buying and selling the same coin at once
4. A single position

88. Balance 10,000. Two correlated trades each risking 100 are stopped out together. What share of the balance is lost?

1. 2%
2. 0.2%
3. 1%
4. 20%

89. Your combined limit for correlated trades is 1.5%. You want two trades in coins that move together. What fits?

1. Risk 1.5% on each
2. Risk 0.75% on each
3. Risk 1% on each
4. Risk 3% on one

90. Two coins showed a correlation of only 0.3 last quarter. Why not treat them as separate risks forever?

1. Correlations change and often jump in sell-offs
2. 0.3 means they always move opposite
3. Correlations never change
4. Low numbers mean no risk

91. What is total open risk?

1. The number of open trades
2. The sum of what you lose if every open stop is hit
3. Your profit for the day
4. The value of all your positions

92. What does a daily loss limit do?

1. Removes all stops
2. Doubles your size after a loss
3. Makes losses impossible
4. Stops trading for the day after a set loss

93. When should you set your limits?

1. Before trading starts
2. After a big loss
3. Never
4. Only on Fridays

94. What is another name for total open risk?

1. Leverage
2. Spread
3. Portfolio heat
4. Slippage

95. Open trades risk 1%, 1.5% and 2%. What is the total open risk?

1. 4.5%
2. 2%
3. 3%
4. 1.5%

96. Your heat cap is 5% and open risk is 4.5%. What is the most a new trade can add?

1. 4.5%
2. 0.5%
3. 5%
4. 1%

97. Why stop trading after hitting the daily limit?

1. Charts stop updating
2. The market closes early
3. Upset traders tend to make worse decisions
4. Limits make the next trade win

98. A 3% daily limit on a 25,000 balance stops trading after what loss?

1. 300
2. 750
3. 75
4. 7,500

99. Balance 10,000 with 3% open risk. A new trade would risk 250. Does it fit under a 5% cap?

1. Yes, it adds only 2.5%
2. Yes, caps do not count new trades
3. No, because 250 is over 3%
4. No, it would take open risk to 5.5%

100. You hit your daily limit, then spot a perfect-looking setup. What does a disciplined trader do?

1. Moves the limit higher
2. Takes it at double size
3. Takes it without a stop
4. Waits until tomorrow, because the limit covers every setup

101. What is risk of ruin?

1. The fee for closing an account
2. The chance of hitting a target
3. The chance of losing so much that you cannot carry on
4. The chance of a single losing trade

102. What happens to the risk of ruin when you bet more per trade?

1. It stays the same
2. It falls
3. It disappears
4. It rises

103. What should a personal risk rulebook include?

1. Only your favorite charts
2. Risk per trade, open risk, loss limits and a leverage cap
3. A list of hot tips
4. Nothing written down

104. When should you change your rulebook?

1. Between sessions, after a calm review
2. In the middle of a losing streak
3. Whenever you feel lucky
4. After every single trade

105. In the app's simulation, how often did risking 20% per trade cut the account to half within 200 trades?

1. About 1.5% of the time
2. Every time
3. Almost never
4. About half the time

106. In the same simulation, how often did risking 1% or 2% per trade cut the account to half?

1. Every time
2. Almost never
3. About half the time
4. About 16% of the time

107. At 20% risk per trade, how many losses in a row take 10,000 below half the start?

1. 4
2. 10
3. 2
4. 69

108. At 1% risk per trade, how many losses in a row take 10,000 below half the start?

1. 4
2. 50
3. 69
4. 100

109. A method wins 35% of trades at 2R, so each trade still averages +0.05R. What does risking 20% per trade tend to do over many trades?

1. Remove all risk
2. Shrink the account, because the swings outweigh the small edge
3. Keep it exactly flat
4. Grow it quickly

110. In the simulation, about how often did risking 10% per trade cut the account to half within 200 trades?

1. About 1.5% of the time
2. Never
3. About 16% of the time
4. About 53% of the time