Unit 2: Theory of Financial Market Trading(D/617/2419)Total Marks:100Diploma Weighting:30%Word Count:3150-3850 (excluding references). Context
•Write a report that answers the following questions.•Write your name and the dateat the top of your report
.•Make sure to number all of your answers to correspond with the relevant question numbers.
•Make sure to include a References section at the end of your paper that cites each source of information used in your answers.
© ABE 2018Assignment tasks Where relevant, the inclusion of diagrams and financial charts is encouraged in your answers Task 1700 Words a) Justify how moving averages can be used to generate trading signals.You must include examples to support your answer.(10marks)
b) Explain ONE disadvantage of using moving averages within a trading strategy
(5 marks)
c) Discuss how this disadvantage can be overcome?(5 marks).
Task 21050 Wordsa) Explain THREE tenets of Dow Theory.For each tenet, provide a detailed example.(15 marks
b) Explain THREE examples of a Candlestick Pattern(15 marks)
Task 3700 words Evaluate the use of each of the following as part of a trading strategy. Include detailed examples for each: -a) Using Momentum
b) Using Bollinger Bandsc) Using volume indicators(20marks)Task 41050 words a)
Discuss the effects of psychological bias on trading behaviour.(15 marks)b) Justify THREE processes to reduce the impact of psychological bias on trading(15 marks)