Experienced customer - Sample exam questions

An experienced client is a new investor categorization that allows Polish traders to include receiving higher leverage than 1:30 on the Forex / CFD market. She stayed introduced by the Polish Financial Supervision Authority at the beginning of August 2019 and is supposed to pose "Milder" an alternative to the option introduced by ESMA, i.e. professional customer.

It is interesting that not only Polish brokerage houses allow to obtain this status, despite the fact that regulations have only been introduced at the national level. You can also become an experienced client at selected foreign brokers who meet certain standards. Yes it is, among others in Tickmill and CMC Markets.

Experienced customer - Conditions

What do you need to do to prove your experience? The regulator has foreseen the need to meet certain criteria. Wider we describe them in a separate article. Initially, the biggest doubt arose was the condition of undergoing 50 hours of training and passing a knowledge test. People who already have a lot of experience in trading, to take such a test, unfortunately, must also pass, and this fact must be properly documented.

The Brokerage House Chamber hurried with help, which immediately began work and at the end of last year introduced the so-called standard for uniform verification of customer knowledge about the CFD market. Thanks to this, every customer experienced in any brokerage house will have a statistically similar state of knowledge (at least from the test and training point of view).

The standard has already been implemented among Polish DMs (IDM members), but any foreign broker can also join it.

What does the test look like?

The test consists of five thematic blocks divided into legal and regulatory issues, general characteristics of the CFD market, risk and orders in trading on these instruments, technical analysis and fundamental analysis. In total, there are 180 questions in the pool (updated once a year), of which 40 questions are drawn. The required number of correctly answered answers is 26, i.e. you need efficiency at a minimum level of 65%. Time to complete the test is 60 minutes.

If you are interested in how the exam may look like, below are three questions from each block, of course, without the correct answer marked :-).

Sample questions - experienced client

Block 1. Legal and regulatory issues

1. Who can provide brokerage services in Poland (including execution of orders on the Forex market)?

a. Each joint-stock company or limited liability company with its registered office in Poland, without additional permits.
b. A brokerage house or a bank conducting brokerage activities with the appropriate permission of the Polish Financial Supervision Authority.
c. Foreign investment company, without having to notify the PFSA.

2. In the event of the insolvency of a Polish investment company covered by the Compensation System operated by the National Depository for Securities (KDPW), the investor shall be guaranteed payment of up to:

a. EUR 100
b. PLN 100
c. 100% up to EUR 3 and 000% above EUR 90 up to the equivalent in PLN 3

3. The answer to the complaint submitted by the client should be considered by the investment company:

a. Immediately, not later than within 30 days of receipt, or 60 days in particularly complex cases
b. Within 5 days of receiving it
c. Within 90 days of receiving it

Block 2. General characteristics of the CFD market

1. In what market situation are CFDs profitable (or threaten to incur losses)?

a) Both in the event of price increases or if they fall
b) Only in the event of price increases
c) Only in the event of price increases and in exceptional cases on the consolidated market

2. What is the name of the order whose primary task is to limit the potential loss for the transaction?

a) Stop Loss
b) Buy Stop or Sell Stop - depending on the party involved in the transaction
c) limit

3. The first currency in a currency pair is the currency:

a) Base
b) Quote
c) Deposit

Block 3. Risk and orders on the CFD market

1. The habit of a good trader is not:

a) using stop losses
b) keeping a transaction log
c) pyramidation of losses

2. The investor topped up the investment account with PLN 10.000, opened a position with a PLN 5000 margin and did not set a stop loss. The price was moving in an undesirable direction until the position was closed by the stop out mechanism. When closing the position, the liquidity was sufficient and there were no price gaps. What approximate amount will remain on the investor's account because the position is closed?

a) PLN 5
b) PLN 3
c) PLN 2

3. Prepared educational materials containing information and research based on historical data or results:

a) do not guarantee future profits
b) guarantee future profits
c) guarantee profits minus the broker's commission

Block 4. Technical analysis

1. Candle formation characterized by a long lower wick and a relatively short body is called:

a) Hammer
b) Black Marubozu
c) harami

2. Indicate the moving average most sensitive to current price fluctuations:

a) Simple 20-period average
b) 20-period exponential mean
c) 10-period exponential mean

3. Indicate a level that is not one of Fibonacci's internal elevations:

a) 61,8%
b) 75,5%
c) 38,2%

Block 5. Fundamental analysis

1. The price of Product A on the store shelf was EUR 5 per kilo a year ago. The media reported that the inflation rate was 5% y / y. What product price can we expect at the moment?

a) EUR 4,75;
b) EUR 5,25;
c) EUR 4,50.

2. The correlation coefficient of currency X and Y at the level of 0,2 indicates:

a) very weak relationship between the currency X and Y;
b) a very strong relationship between the currency X and Y;
c) the inverse correlation between the currency X and Y.

3. What does "forward guidance" mean?

a) Central Bank announcement what monetary policy it intends to pursue in the future
b) "instructions" of the Central Bank regarding the exchange rate of the national currency
c) Information on the future level of unemployment