A mechanical trading rule that generates a buy signal if the price of the security moves by more than a pre- established percentage from its previous lowest price and a sell signal if it again moves by the same percentage from its previous highest price is known as what?

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Quizplus · Accepted Answer

This is known as a filter rule, as it uses a percentage filter to generate buy and sell signals. Technical and fundamental rules are broader categories that can encompass a variety of trading strategies, while a block rule refers to a specific order size or trade execution strategy.

A Mechanical Trading Rule That Generates a Buy Signal If