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

Independent thinking

Failure to stay the course

Pride of opinion

Failure to abide by classic trading rules

Wave four should not overlap wave one

The theory is composed of time, ratios and wave forms, in that order of importance

The theory was originally applied to individual stocks and does not work as well for indices

The theory works best in commodity markets traded primarily by professional traders such agricultural futures

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

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

10

96

48

30

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

They can be bullish or bearish depending on the market

They are bearish after a rally

They are called hammers after a downtrend

All of the above

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

It has the same form as the shooting star pattern

It comes at the end of a market downtrend

It is a bottom reversal signa

Head and shoulders

Inverse head and shoulders

Triangle

Double top

Volume

Trend

Slope or momentum

Ratio of two prices

TRIX

Money Flow Index

True Strength Index

Intraday Intensity

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

Summation

Synchronicity

Harmonicity

Alternation

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

There is a different measuring objective for each

Flags fly at half mast and pennants are considered reversal patterns

The move after the pattern will be equal to the move before the pattern

Half the distance of the preceding move from breakout to the flag or pennant

Failure

Shortfall

Throwback

Premature Breakout

Linear relationship, as the Best Fit line is curvilinear.

Linear relationship, as points fall generally along a straight line.

Non-linear relationship, as points fall generally along a straight line.

Non-linear relationship, as the Best Fit line is curvilinear.

Point-and-Figure

Equivolume

Leaf and stem

Bar/candle

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

It is continuation pattern

The three candles do not have to be on consecutive trading periods

When succes

Sentiment indicators

Breadth indicators

Flow of Funds indicators

Cycle indicators

Both candles must have shaven tops

Both candles must have the same high price

Both candles must have the same color real bodies

The tops of both real bodies must be the same

It is the major sentiment index used for options trading

It is used as a contrary indicator

Extreme levels are trading signals

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

Simple moving average

Point and figure

Swing breakout

N-day breakou

the number of contracts traded at each price tick.

the number of contracts traded at each time interval.

the change in open interest during a particular time interval.

the number of recorded price changes during a particular time interval.

A relative loss of 20% can be made back with a relative gain of 20%, but an absolute 20% loss requires a 25% gain to break even

A relative loss of 20% can be made back with a relative gain of 20%, but an absolute 20% loss don't require a 25% gain to break even

A relative loss of 20% can be made back with a relative gain of 20%, but an absolute 10% loss requires a 25% gain to break even

A relative gain of 20% can be made back with a relative loss of 20%, but an absolute 20% loss requires a 25% gain to break even

First day of the week

Day before a holiday

Triple witching days

Summer days

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

Logarithmic scale

Linear scale

Exponential scale

Arithmetic scale

Saliency bias

Framing bias

Sunk-cost bias

Anchoring bias

Maximum Cumulative Drawdown

Maximum Favorable Excursions

Longest Flat Time

Length of Average Winning Trade

Beta

Sharpe Ratio

Calmar ratio

Treynor Ratio

Point and figure

Simple moving average

Linear regression slope

N-day breakout

When virtually everyone takes the position that the market is headed in a certain direction, there is no one left to push the trend any further

Always trade against the prevailing trend

The future can be extrapolated based on present trends

Fundamental analysis is always wrong

The January Barometer

The January Effect

Kondratieff K-Wave

Hindenburg Omen

Members only

Affiliates only

CMT candidates

All of the above