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CMT Association CMT-Level-II Exam Syllabus Topics:

SectionObjectives
Advanced Technical Analysis Concepts- Behavioral and Intermarket Analysis
  • 1. Intermarket relationships
    • 2. Investor psychology in trends
      - Cycle and Wave Analysis
      • 1. Elliott Wave principles
        • 2. Market cycles
          Chart and Pattern Analysis- Candlestick and Price Action Analysis
          • 1. Candlestick formations
            • 2. Support and resistance structures
              - Classical Chart Patterns
              • 1. Reversal patterns
                • 2. Continuation patterns
                  Technical Indicators and Systems- System Construction and Validation
                  • 1. Backtesting concepts
                    • 2. Risk-adjusted performance measures
                      - Trend and Momentum Indicators
                      • 1. Oscillators and momentum tools
                        • 2. Moving averages
                          Market Analysis Foundations- Market Structure and Behavior
                          • 1. Trend formation concepts
                            • 2. Market participants and mechanics

                              CMT Association CMT Level II Sample Questions:

                              1. Which of the following is true of moving average construction?

                              A) The simple moving average is the geometric mean of previous prices
                              B) The linear weighted average addresses the problem of including only the price action covered by the length of the average itself
                              C) A shorter term moving average more closely tracks price action
                              D) In the exponential moving average more weight is given to volume on higher volume days


                              2. Which of the following would be a valid trading interpretation of head and shoulder chart patterns?

                              A) Buy when the right part of the head is forming
                              B) Buy on the first rally after the neckline is penetrated
                              C) Sell when the right shoulder penetrates the neckline
                              D) Buy when the head forms a higher high


                              3. Which of the following rules can be utilized as an entry strategy for a long trade based bullish MACD histogram divergence?

                              A) Go long when the MACD line crosses above the signal line for the second time confirming the divergence.
                              B) Go long when the MACD slow line turns higher.
                              C) Go long when the MACD fast line turns higher.
                              D) Go long when the histogram ticks up from the second bottom.


                              4. A technical analyst was at a convention in which a long-term point and figure stock chart was being discusseD. He noticed that low-price action did not appear as active as high-price action on the chart. One suggestion the technical analyst could provide, to clear up this apparent distortion, would be to:

                              A) Change the scale to arithmetic
                              B) Increase the time frame on the chart
                              C) Change the charting scale to logarithmic
                              D) Add the daily opening prices to provide a more visual benchmark of price changes


                              5. Which of the following is a valid guideline in using technical analysis to make investment decisions among stock market sectors?

                              A) Relative strength analysis allows for identification of the strongest and weakest sectors
                              B) This analysis does not hold for options or mutual funds due to the unique characteristics of these securities
                              C) Sectors whose relative strength lines are just turning up after a downtrend should be sold
                              D) Charting tools such as trendlines and moving averages should not be employed with relative strength lines


                              Solutions:

                              Question # 1
                              Answer: C
                              Question # 2
                              Answer: C
                              Question # 3
                              Answer: D
                              Question # 4
                              Answer: C
                              Question # 5
                              Answer: A

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