CMT Association CMT-Level-II CMT Level II Exam Exam Practice Test

Corporate buy backs

Price/earnings ratio

Insider buying

Put/call ratio

Point and figure

Simple moving average

Exponential smoothing

N-day break

It is a reversal pattern

It occurs when the real bodies of two consecutive candles do not overlap

It occurs when the shadows of two consecutive candles do not overlap

One should buy on dips after a falling window

(expected return plus the risk free interest rate) divided by the standard deviation of returns

(expected return minus the risk free interest rate) divided by the standard deviation of returns

(expected return divided by the risk free interest rate) divided by the standard deviation of returns

(expected return times the risk free interest rate) divided by the standard deviation of returns

Bullish or Bearish Triangle

Triple Top or Triple Bottom

Double Top or Double Bottom

Bullish or Bearish Fulcrum

Lack of complete information

Failing to consider trading costs

Conflict between technical and fundamental models

Emotional considerations cloud judgment

It is symmetric about the mean

The mean, median, and mode are all located at the trough

It extends infinitely in both directions

It is bell-shaped, with its peak at the center

Point-and-figure charts

Candlestick charts

Bar charts

Line charts

Inside day

Outside day

Gap

Andrew's Pitchfork

All new techniques must be fully documented even if proprietary methods must be disclosed to do so

New procedures must be documented as to procedure and rationale

New procedures must be supported by adequate back testing confirmed by at least technician

New methods need not be consistent with the accumulated knowledge of the field of technical analysis

Gaps will not be recorded, as the index only uses the day high, day low, and closing price.

It suffers from the "drop off" effect, as it uses a simple moving average.

It measures deviations of price within two standard deviations of the range.

The index will rise above zero in an upward trend

Initial Stop

Trailing stop

Sell stop

Standard deviation stop

Simple trade signals can be used for new commitments whereas complex signals are needed for liquidation purposes

Long positions are closed when they fall below the trend line and short positions are closed when they rise above the trend line

Stop losses should be placed below the last column of Os in an uptrend

All of the ab

Windows

Rising three methods

Hanging man

Falling three methods

Prices are consolidating but OBV direction has turned higher which indicates accumulation by long term traders.

Negative divergence between price and indicator suggest distribution is taking place at top.

Prices are higher but OBV is sideways which can't be interpreted.

Positive divergence between price and indicator suggest uptrend is weak and near reversal.

A

B

C

D

They are hard to make the most of the profit

They are often difficult to identify

They are relatively common in occurrence

The breakout lines are moving permanently away from each other

ATR

Parabolic SAR

TRIN

Pivot Point Technique

Hold long positions

Close out long positions

Close out short positions

Trading decisions cannot be made by using trend lines.

The best combination is when there is an upward breakout on less than normal breakout volume with no pullback

The best mix is when there is a downward breakout on less than normal breakout rate and with few pullbacks

The best combination is when a downward breakout happens on an under-average amount of breakout with no pullback

The best combination is when there is a downward breakout at an above-average breakout rate with few pullbacks

Set the time-routine

You need a Risk Management Plan

You need to configure the machine time horizon

Determine what markets to concentrate can be delayed initially

First, make a decision as to how many columns to average.

First, re-draw the chart as a 1X1 chart,

First, find the longest column, and count the number of filled boxes.

First, convert the chart to a conventional line chart.

Appear to work poorly because price seems to divorce itself from economics.

Appear to work exceptionally well because of the market's flight to safety.

Function no differently than at any other time in the market cycle because of shortcomings in the measurement procedures.

Suggests the duration of the next downleg in the market cycle

use particular care in determining applicable fiduciary duty.

use reasonable care and exercise independent professional judgment.

maintain and improve the competence of other investment professionals.

practice and encourage others to practice in a professional and an ethical manner.

Linearity

Normality

Outliers and homoscedasticity

All of the above

His work is valid for equities but does not apply to commodities

When price meets time, a change is imminent

Gann used 10%, 20%, 30% and 40% as his key resistance and retracement levels

Gann's work is an advanced interpretation of point and figure charts

Open interest

Contract volume

Total volume

Breadth

Only knowledge of current clients and employers must be kept in confidence

The MTA Code of Ethics does not apply to confidentiality of unlawful client or employer activity

The MTA Code of Ethics is silent on client and employer confidentiality so members must refer to laws/rules promulgated by regulatory authorities

All information pertaining to any lawful activity of past or present clients or employers must be kept in confidence

Analysts can never copy other analysts work

Other analysts work can be copied with permission in advance

If the author of the original work is deceased, this work cannot be copied since permission cannot be obtained

Research reports which are not direct copies but use substantially the same language as other analysts work would be permissible

A broken support line no longer has a valid technical interpretation

The break in the support line would be a buy signal

The support line now becomes a resistance line

The break in the support line is of no technical importance

Is a minor pattern which is rarely seen and has no real significance on either the near or long term

Occurs when price passes through specific levels

Has no significance to a trader of investor

Needs to be confirmed by other indicators

Bond prices move inversely to equities

Bonds prices trend in the same direction as commodities

The U.S. dollar moves inversely to commodities

Financial stocks trend inversely to bonds

Bonds

Bullion

Precious metal

Energy

RSI = 100 - (100/(1 X RS))

RSI = 100 - (100/(100 + RS))

RSI = 100 - (100/(1 + RS))

RSI = 100 + (100/(1 + RS))

The top of the upper shadow of one candle is at the same price as the bottom of the lower shadow of the other candle

The opening price of the second candle equals the opening price of the first candle

The two candles have the same color

It is a reversal pattern

The bands are based on the moving averages of prices

The bands are based on moving averages of prices plus or minus a standard deviation factor

When price equals the upper band it is considered bullish

When prices are above the upper band they are considered to be in oversold territory

Distance between troughs

Distance between peaks

Useful in checking where the trend direction is headed or if it is changing

To the left when the peak is beyond the halfway point

Traders could determine the price at which supply and demand were equalized

Traders would record four bars at that price

Traders could determine the support

Traders could determine the resistance zones

It is the opposite of the engulfing pattern

It is considered a continuation pattern

The color of the real body is of utmost importance to its significance

All of the above