CMT-Level-II CMT Level II Exam Questions and Answers

A hammer always has a black real body

A hammer comes after market rallies

A hammer has no lower shadow

A hammer need not be confirmed by other indicators

First day of the week

Day before a holiday

Triple witching days

Summer days

It is a profitable pattern

It consists of a combination of a broadening pattern and a symmetrical triangle

It occurs at the top of a very sharp upward rise in prices

It is not rare at price bottoms

There must be a reason for its existence and it must have regular intervals between peaks

There must be confidence that the cycle will continue and it must be synchronized with another cycle

There must be a reason for its existence and confidence that it will continue

There must be a way to forecast it and it must be synchronized with another cycle

Longer time periods increase the signaling importance of saucers but not of peaks

Saucer bottoms are more valid when they form over a short time period

Long time periods between market peaks and troughs reduce the potential for a market reversal

Longer formation time periods increase the signaling importance of both saucers and peaks

Trading decisions are less consistent

Most computerized systems are unprofitable in non-trending markets

Profit trades are exited too early

Computerized systems miss many market trends

Trend lines

Stops

Directional movement index

Average divergence index

The arithmetic scale is preferred

A linear scale is preferred

A logarithmic scale is preferred

A logarithmic or a linear scale is preferred

Umbrella

Hammer

Doji

Windows

Logarithmic scale

Linear scale

Exponential scale

Arithmetic scale

Moving averages provide the most valid trade signals in sideways markets

Moving averages provide the most valid trade signals in trending markets

Moving averages always provide more valid trade signals than oscillators

Oscillators always provide more valid trade signals than moving averages

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

Simple moving average

Point and figure

Swing breakout

N-day breakou

95%, 25%

95%, 5%

75%, 25%

75%, 15%

Initial Stop

Trailing stop

Sell stop

Standard deviation stop

Buy or sell as soon as a new column is created on the chart

Close out your trade on the second reversal back in the direction of the original signal

Take small consistent profits, but allow large, windfall profitable positions to run

Buy or sell on pullbacks after initial trade signal

spread.

regression.

moving Average.

correlation coefficient.

Point-and-Figure

Equivolume

Leaf and stem

Bar/candle

Relative strength analysis allows for identification of the strongest and weakest sectors

Charting tools such as trendlines and moving averages should not be employed with relative strength lines

Sectors whose relative strength lines are just turning up after a downtrend should be sold

This analysis does not hold for options or mutual funds due to the unique characteristics of these securities

Upside breakout above an ascending triple top signals sell

Upside breakout above a bullish resistance line signals sell

Downside breakout of a bearish triangle signals sell

Downside breakout below a bearish support line signals buy

A

B

C

D

Put/ call parity

Plurality index

Implied volatility

Standard deviation

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

positive

meaningful

low/negative

moderately positive

To reduce errors in a system

To improve the efficiency of the system

To see how long a pattern takes to form

All of the above statements

Change the charting scale to logarithmic

Increase the time frame on the chart

Change the scale to arithmetic

Add the daily opening prices to provide a more visual benchmark of price changes

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

Shares are losing momentum which can be confirmed by negative divergence between price and ROC; trader should be cautious and be quick to reduce position on a violation of trendline.

Shares are making a series of higher highs and higher lows; ROC has turned negative which is confirming the price action; should use current pullback to add to position.

ROC has turned negative which is a sell signal; should initiate a short position.

Negative divergence observed between price and ROC should be ignored as prices are near life time highs.

Lunar, presidential, seasonal, alpha/beta and Kondratieff

Kondratieff, presidential, alpha/beta, seasonal and lunar

Alpha/beta, presidential, seasonal, lunar, and Kondratieff

Alpha/beta, lunar, seasonal, presidential and Kondratieff

do nothing because the branch is outside of German jurisdiction.

seek advice from the company counsel to determine appropriate action.

do nothing because the branch is outside of Singapore's jurisdiction.

disassociate himself from the case with a written report to his supervisor.

A complete bull market cycle is made up of eight waves, three waves up followed by five waves down

A trend divides into three waves in the direction of the next longer trend

Corrections always take place in five wave patterns

The two types of simple corrections are zigzags and flats

Chart pattern interpretation is based solely on the current pattern and ignores the prior trend

Chart patterns should be interpreted separately from trendline analysis

Longer-term patterns are more valid than shorter patterns

Topping patterns usually have smaller price ranges and take longer to build

A hanging man always has a black real body

A hanging man comes after a market rally

A hanging man has no lower shadow

A hanging man need not be confirmed by other indicators

Buy when prices penetrate the upper band

Close out longs when prices reverse and go below the center of the band

Close out shorts when prices reverse and go below the center of the band

Sell when price breaks below the lower band

Martingale Betting System

Parabolic System

Directional Move System

Pyramiding

It is a gradual and steady rise

Each real body opens within or near the prior session's real body

It is composed of three white candles with successively higher closes

Each candle should have a long upper shadow