CMT-Level-II Sample Questions Answers

The link between the dollar and commodities

The link between commodities and bonds

Intermarket analysis is unaffected by deflation

The link between the equity and bond markets

Bullish or Bearish Triangle

Triple Top or Triple Bottom

Double Top or Double Bottom

Bullish or Bearish Fulcrum

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

Breaking of the centerline

Confirmation from the MACD fast line and signal line

Price action extended above/below the 26 week moving average

The MACD histogram has to record atleast a 200 bar low/high on the first trough/peak

Beta

Sharpe Ratio

Calmar ratio

Treynor Ratio

a rampant bull market.

a market consolidation.

the last legs of an uptrend.

a market correction (bear market).

Trendline analysis can be used with MACD

MACD crossover rules are different than other crossover rules

MACD histograms are best used to initiate new positions contrary to the price trend

When the slower MACD line is above the faster line, the MACD histogram will be above zero

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.

Indicators do not take into account trading costs

Indicators optimized for the past often do not work in the present

Indicators are frequently so complex to create as to be of little use in making trading decision

Indicators usually give conflicting trading advice

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

Maximum Cumulative Drawdown

Maximum Favorable Excursions

Longest Flat Time

Length of Average Winning Trade

A

B

C

D

Point-and-figure charts

Line charts

Japanese candlestick charts

Bar charts

keeping the policy change within the firm.

keeping the policy change within the firm and existing clients.

updating disclosures when the policy change is implemented.

requiring Smith to obtain permission from each client prior to implementation of the new policy.

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

MACD line

RSI

Relative strength

Advance/Decline line

Switch time frames

Remove price trend

Remove volume trend

Use n period extremes

spread.

regression.

moving Average.

correlation coefficient.

Sentiment indicators

Breadth indicators

Flow of Funds indicators

Cycle indicators

ATR

Parabolic SAR

TRIN

Pivot Point Technique

Contrary opinion can be used as the sole decision source in entering into new trading positions

Contrarians trade against the consensus even when it is within a normal range

Contrary opinion is more useful in deciding when to exit positions than as a timing tool

Once all long positions have been set, there is diminishing influence by the bulls

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.

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

Head and shoulders

Wedge

Broadening top

V-bottom

Statements must be consistent with available evidence

Statements must be consistent with the accumulated knowledge of technical analysis

Statements may not indefensibly disparage the work of other analysts

All of the above

Statistical jargon for the typical outcome

The midpoint of a trading range

A popular Elliott Wave guideline

A common pitfall of novice traders

Members only

Affiliates only

CMT candidates

All of the above

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

It requires an 80% gain to break even

It requires a 100% gain to break even

It requires a 90% gain to break even

It requires a 70% gain to break even

Simple moving average

Point and figure

Swing breakout

N-day breakou

Candlestick charts

Point and figure charts

Equivolume charts

Continuation charts

Volume is not used in futures, only open interest

Contract volume and total open interest are used in bonds

Declining volume and open interest suggest the trend will continue

Increasing volume and open interest suggest the trend will continue

To help identify long-term variations from the short-term trend

To spot confirmations between technical indicators

To pinpoint the crossing of two moving averages

All of the above

Failure

Shortfall

Throwback

Premature Breakout

It depends upon the type of analysis only

It depends upon the period being explored only

It depends upon the type of analysis or the period being explored

It depends upon the type of analysis and the period being explored