CHARTERED MARKET TECHNICIAN (CMT)
CMT - CHARTERED MARKET TECHNICIAN | FINAL EXAM READY -
VERIFIED QUESTIONS AND ANSWERS - COMPREHENSIVE
LATEST VERSION
1. Which nineteenth-century Wall Street Journal editor's writings form
the foundation of Dow Theory?
A. Charles H. Dow
B. Ralph Nelson Elliott
C. W.D. Gann
D. Richard Wyckoff
Charles Dow's editorials on market averages, later organised by Hamilton
and Rhea, formed the basis of the Dow Theory.
2. Dow Theory classifies market trends into how many degrees?
A. Four: primary, intermediate, minor, and micro
B. Three: primary, secondary, and minor
C. Two: major and minor
D. Five, matching Elliott Wave
Dow Theory recognizes primary, secondary (intermediate), and minor
trends, likened to the tide, waves, and ripples.
3. Under classical Dow Theory, a valid signal of a primary trend change
requires:
A. A single average making a new high
B. Ten consecutive up days
C. Confirmation between the Industrial and Transportation averages
D. A 20% move in the Industrials alone
Page 1 of 52
, CHARTERED MARKET TECHNICIAN (CMT)
Dow Theory holds that the averages must confirm one another before a
trend change is considered valid.
4. In Dow Theory, volume is expected to:
A. Have no relationship to trend direction
B. Remain constant regardless of trend
C. Expand only during secondary reactions
D. Expand in the direction of the primary trend
Volume should increase as price moves with the primary trend and contract
on corrective moves, confirming trend health.
5. Per Dow Theory, an existing trend is assumed to remain in force:
A. Until a 10% retracement occurs
B. Until trading volume doubles
C. For a fixed period of 90 days
D. Until definitive signals prove it has reversed
Dow Theory treats trend continuation as the default assumption, placing
the burden of proof on reversal signals.
6. The Random Walk Hypothesis poses a challenge to technical analysis
by asserting that:
A. Volume determines future price with certainty
B. Prices always trend for long periods
C. Chart patterns repeat with 100% reliability
D. Price changes are independent and unpredictable from past data
Random Walk theorists argue successive price changes are independent,
undermining the premise that past price patterns predict future moves.
7. Which of the following is one of the three core premises underlying
technical analysis?
A. Markets are always efficient
B. Fundamentals are irrelevant to price
C. Only volume matters, not price
D. Market action discounts everything
The classic premises are that market action discounts everything, prices
move in trends, and history tends to repeat itself.
Page 2 of 52
, CHARTERED MARKET TECHNICIAN (CMT)
8. "Technical Analysis of Stock Trends," a foundational text on classical
chart pattern analysis, was authored by:
A. John Murphy and Martin Pring
B. Robert Edwards and John Magee
C. Benjamin Graham and David Dodd
D. Ralph Elliott and A.J. Frost
First published in 1948, Edwards and Magee's text codified classical chart
pattern analysis still taught today.
9. The Wave Principle, describing recurring five-wave impulse and
three-wave corrective structures, was developed by:
A. J. Welles Wilder
B. George Lane
C. Ralph Nelson Elliott
D. Charles Dow
Elliott introduced the Wave Principle in the 1930s, later popularized by
Frost and Prechter.
10. Which statement best reflects the technician's view of market
history?
A. Human behavior patterns recur, so price patterns tend to repeat
over time
B. Only the most recent trading day is relevant
C. History repeats exactly and predictably every cycle
D. Historical prices have no bearing on future prices
Technicians argue that because market participants' psychology is
consistent over time, similar chart patterns tend to recur, not that outcomes
are guaranteed.
SECTION: CHART CONSTRUCTION & TYPES
11. A line chart is typically constructed by connecting which price
points across successive periods?
A. Volume-weighted average price
B. The midpoint of the high-low range
C. Closing prices only
D. Opening prices only
Page 3 of 52
, CHARTERED MARKET TECHNICIAN (CMT)
Line charts plot only the close of each period, producing a simplified view of
price direction.
12. On a standard OHLC bar chart, the small tick mark on the left side
of the vertical bar represents:
A. The opening price
B. The closing price
C. The low of the period
D. The high of the period
By convention, the left tick shows the open and the right tick shows the
close on an OHLC bar.
13. On a candlestick chart, the "real body" represents the range
between:
A. The average price and the close
B. The open and the close
C. The high and the low
D. The prior close and the current open
The real body is bounded by the open and close; the thin lines above and
below (wicks/shadows) show the high and low.
14. A defining feature of point-and-figure charting is that it:
A. Requires equal time intervals between every column
B. Uses only closing prices smoothed by a moving average
C. Disregards the passage of time and plots only significant price
reversals
D. Plots volume as the width of each bar
P&F charts filter out time and minor price noise, adding an X or O only
when price moves by a defined box size.
15. Renko charts differ from time-based bar charts because each new
brick is added:
A. Only when price moves by a predetermined fixed amount,
regardless of time elapsed
B. At the close of every fixed time interval, regardless of price movement
C. At every tick, without filtering
D. Only when volume exceeds a threshold
Page 4 of 52
CMT - CHARTERED MARKET TECHNICIAN | FINAL EXAM READY -
VERIFIED QUESTIONS AND ANSWERS - COMPREHENSIVE
LATEST VERSION
1. Which nineteenth-century Wall Street Journal editor's writings form
the foundation of Dow Theory?
A. Charles H. Dow
B. Ralph Nelson Elliott
C. W.D. Gann
D. Richard Wyckoff
Charles Dow's editorials on market averages, later organised by Hamilton
and Rhea, formed the basis of the Dow Theory.
2. Dow Theory classifies market trends into how many degrees?
A. Four: primary, intermediate, minor, and micro
B. Three: primary, secondary, and minor
C. Two: major and minor
D. Five, matching Elliott Wave
Dow Theory recognizes primary, secondary (intermediate), and minor
trends, likened to the tide, waves, and ripples.
3. Under classical Dow Theory, a valid signal of a primary trend change
requires:
A. A single average making a new high
B. Ten consecutive up days
C. Confirmation between the Industrial and Transportation averages
D. A 20% move in the Industrials alone
Page 1 of 52
, CHARTERED MARKET TECHNICIAN (CMT)
Dow Theory holds that the averages must confirm one another before a
trend change is considered valid.
4. In Dow Theory, volume is expected to:
A. Have no relationship to trend direction
B. Remain constant regardless of trend
C. Expand only during secondary reactions
D. Expand in the direction of the primary trend
Volume should increase as price moves with the primary trend and contract
on corrective moves, confirming trend health.
5. Per Dow Theory, an existing trend is assumed to remain in force:
A. Until a 10% retracement occurs
B. Until trading volume doubles
C. For a fixed period of 90 days
D. Until definitive signals prove it has reversed
Dow Theory treats trend continuation as the default assumption, placing
the burden of proof on reversal signals.
6. The Random Walk Hypothesis poses a challenge to technical analysis
by asserting that:
A. Volume determines future price with certainty
B. Prices always trend for long periods
C. Chart patterns repeat with 100% reliability
D. Price changes are independent and unpredictable from past data
Random Walk theorists argue successive price changes are independent,
undermining the premise that past price patterns predict future moves.
7. Which of the following is one of the three core premises underlying
technical analysis?
A. Markets are always efficient
B. Fundamentals are irrelevant to price
C. Only volume matters, not price
D. Market action discounts everything
The classic premises are that market action discounts everything, prices
move in trends, and history tends to repeat itself.
Page 2 of 52
, CHARTERED MARKET TECHNICIAN (CMT)
8. "Technical Analysis of Stock Trends," a foundational text on classical
chart pattern analysis, was authored by:
A. John Murphy and Martin Pring
B. Robert Edwards and John Magee
C. Benjamin Graham and David Dodd
D. Ralph Elliott and A.J. Frost
First published in 1948, Edwards and Magee's text codified classical chart
pattern analysis still taught today.
9. The Wave Principle, describing recurring five-wave impulse and
three-wave corrective structures, was developed by:
A. J. Welles Wilder
B. George Lane
C. Ralph Nelson Elliott
D. Charles Dow
Elliott introduced the Wave Principle in the 1930s, later popularized by
Frost and Prechter.
10. Which statement best reflects the technician's view of market
history?
A. Human behavior patterns recur, so price patterns tend to repeat
over time
B. Only the most recent trading day is relevant
C. History repeats exactly and predictably every cycle
D. Historical prices have no bearing on future prices
Technicians argue that because market participants' psychology is
consistent over time, similar chart patterns tend to recur, not that outcomes
are guaranteed.
SECTION: CHART CONSTRUCTION & TYPES
11. A line chart is typically constructed by connecting which price
points across successive periods?
A. Volume-weighted average price
B. The midpoint of the high-low range
C. Closing prices only
D. Opening prices only
Page 3 of 52
, CHARTERED MARKET TECHNICIAN (CMT)
Line charts plot only the close of each period, producing a simplified view of
price direction.
12. On a standard OHLC bar chart, the small tick mark on the left side
of the vertical bar represents:
A. The opening price
B. The closing price
C. The low of the period
D. The high of the period
By convention, the left tick shows the open and the right tick shows the
close on an OHLC bar.
13. On a candlestick chart, the "real body" represents the range
between:
A. The average price and the close
B. The open and the close
C. The high and the low
D. The prior close and the current open
The real body is bounded by the open and close; the thin lines above and
below (wicks/shadows) show the high and low.
14. A defining feature of point-and-figure charting is that it:
A. Requires equal time intervals between every column
B. Uses only closing prices smoothed by a moving average
C. Disregards the passage of time and plots only significant price
reversals
D. Plots volume as the width of each bar
P&F charts filter out time and minor price noise, adding an X or O only
when price moves by a defined box size.
15. Renko charts differ from time-based bar charts because each new
brick is added:
A. Only when price moves by a predetermined fixed amount,
regardless of time elapsed
B. At the close of every fixed time interval, regardless of price movement
C. At every tick, without filtering
D. Only when volume exceeds a threshold
Page 4 of 52
