CMT Level 1 Exam | 2026/2027 Edition | Real Exam
Questions with 100% Verified Correct Answers
Chartered Market Technician (CMT) Association Level 1 Assessment | Expert-Verified
Q&A | Certification-Ready Format
This 2026/2027 Chartered Market Technician (CMT) Association Level 1 evaluation document
consolidates one hundred and thirty-two (132) multiple-choice items drawn from the
foundational domains of technical analysis and the financial markets. It emphasizes the critical
integration of chart construction, trend analysis, technical indicators, momentum oscillators,
market theories (including Dow Theory, Elliott Wave, and Wyckoff), and behavioral finance to
ensure a thorough command of technical analysis methodologies. Every item has been expert-
verified with fully correct answers and detailed rationales, designed for accurate self-evaluation
and certification-level readiness. The assessment reflects current financial market standards and
the 2026/2027 CMT Association Level 1 curriculum, providing candidates with a rigorous
framework for evaluating comprehension of price action, market structure, and the proven
methodologies that underpin disciplined technical analysis.
Content Area Overview
Content Area Questions Key Topics Weight
Theory and History of 13 Core assumptions, 10%
Technical Analysis technical vs. fundamental
analysis, history, Dow
origins, market efficiency
Charting, Trend Analysis & 33 Chart types, candlesticks, 25%
Chart Patterns trendlines,
support/resistance,
reversal & continuation
patterns, gaps
Momentum Indicators, 27 SMA/EMA/WMA, MACD, 20%
Oscillators & Moving RSI, stochastic, Bollinger
Averages Bands, ADX, ATR, CCI,
Williams %R, MFI
Volume, Breadth, and 20 Volume principles, OBV, 15%
Market Internals A/D line, advance/decline
line, TRIN, McClellan,
put/call, VIX, open interest
Market Theories: Dow, 20 Dow tenets, three trends, 15%
Elliott Wave, & Wyckoff impulse/corrective waves,
Fibonacci,
accumulation/distribution,
springs
Behavioral Finance, Risk 19 Loss aversion, biases, 15%
Management & prospect theory, position
Performance sizing, risk/reward,
Sharpe, drawdown,
correlation
Total 132 All 2026/2027 CMT 100%
Association Level 1
content domains
Examination Questions
,Domain: Theory and History of Technical Analysis (10%)
1. Technical analysis is founded on which of the following core assumptions?
A. Price reflects all known market information, prices move in trends, and history tends to
repeat itself
B. Intrinsic value always converges with market price over short horizons
C. Markets are perfectly efficient and price changes are completely random
D. Earnings reports are the primary driver of all price movement
Correct Answer: A
Rationale: The three pillars of technical analysis hold that (1) market price discounts
everything, (2) prices move in persistent trends, and (3) market behavior, rooted in human
psychology, tends to recur in recognizable patterns.
2. Which statement best captures the central distinction between technical and
fundamental analysis?
A. Technical analysis is limited to daily charts, while fundamental analysis applies only to
weekly charts
B. Technical analysis studies market action itself, while fundamental analysis studies the
underlying economic and financial drivers of value
C. Technical analysis is valid only for commodities, while fundamental analysis applies only
to equities
D. Technical analysis relies exclusively on earnings, while fundamental analysis uses price
Correct Answer: B
Rationale: Technical analysis studies the supply-and-demand action reflected in price, time,
and volume, whereas fundamental analysis evaluates economic, sector, and company-level
factors to estimate intrinsic value.
3. Charles Dow is most closely associated with which foundational contribution to
technical analysis?
A. The development of the Japanese candlestick method
B. The articulation of Dow Theory and the creation of the Dow Jones Industrial and Rail
averages
C. The invention of the relative strength index (RSI)
D. The formulation of Elliott Wave Principle
Correct Answer: B
Rationale: Charles Dow, co-founder of the Wall Street Journal, articulated the principles later
named Dow Theory and established the Industrial and Transportation averages that remain
central to market structure analysis.
4. The assumption that 'price discounts everything' most directly implies that:
A. All known information, expectations, and sentiment are already reflected in the current
market price
B. Price can never deviate from fair value
C. News events have no measurable effect on price
D. Technicians should ignore all fundamental data because it is irrelevant
Correct Answer: A
,Rationale: This assumption means the technician studies price action itself as the most complete
and current summary of all market information, expectations, and participant sentiment,
without needing to re-derive value from fundamentals.
5. Which concept challenges technical analysis by asserting that past price
movements cannot be used to predict future prices?
A. Elliott Wave Principle
B. The Random Walk Theory
C. Dow Theory
D. Wyckoff's Law of Cause and Effect
Correct Answer: B
Rationale: Random Walk Theory holds that successive price changes are independent and
unpredictable, asserting that historical price data carries no predictive value, a view
technicians contest by identifying recurring, exploitable patterns.
6. The Efficient Market Hypothesis in its strongest form asserts that:
A. Prices reflect only historical trading data
B. Prices reflect all information, both public and private, leaving no room for persistent
excess returns
C. Prices fully reflect all publicly available information
D. Markets are efficient only during periods of low volume
Correct Answer: B
Rationale: Strong-form EMH claims prices reflect all information, public and private, so even
insider information cannot generate abnormal returns; technicians counter that market
inefficiencies and behavioral patterns create recurring opportunities.
7. Who is credited with introducing Japanese candlestick charting techniques to the
Western financial community?
A. Richard Wyckoff
B. Welles Wilder
C. R.N. Elliott
D. Steve Nison
Correct Answer: D
Rationale: Steve Nison is widely credited with popularizing Japanese candlestick techniques in
the West through his writings and instruction in the late 1980s and early 1990s, translating
centuries-old methods from Japanese rice traders.
8. Point and figure charting is historically distinguished by its emphasis on:
A. Price changes of a defined magnitude while disregarding the passage of time
B. Time as the primary axis of analysis
C. Intraday tick-by-tick movement only
D. Daily closing prices plotted with volume
Correct Answer: A
Rationale: Point and figure charts filter insignificant movements by plotting price reversals of a
set box size, ignoring time entirely, which sharpens focus on significant supply-and-demand
shifts and clean trendlines.
, 9. The philosophical basis of technical analysis draws most heavily upon which
academic discipline to explain recurring chart patterns?
A. Pure macroeconomic accounting
B. Astrology and celestial cycles
C. Quantum mechanics
D. Behavioral psychology and the study of crowd behavior
Correct Answer: D
Rationale: Recurring patterns are attributed to consistent human psychological responses and
crowd behavior; because market participants react to similar conditions in similar ways,
recognizable formations tend to repeat across time.
10. A technician primarily defines the market's prevailing condition by analyzing:
A. The most recent earnings report
B. The slope of the GDP growth curve
C. Central bank policy statements only
D. Price action, including trend, support, resistance, and volume
Correct Answer: D
Rationale: Technicians read the market's condition directly from price action and its associated
volume, deriving trend, momentum, and structure from the market's own behavior rather than
external economic variables.
11. Which of the following is a defining characteristic that makes technical analysis
broadly applicable across markets?
A. It applies only to stocks listed on a single exchange
B. It requires exclusive access to order flow data
C. It functions solely during bull markets
D. Its principles are market-agnostic, applying to any instrument where price is driven by
supply and demand
Correct Answer: D
Rationale: Because technical analysis studies the universal mechanics of supply and demand
reflected in price, its methods transfer across equities, futures, forex, commodities, and other
freely traded instruments.
12. The comparative advantage of technical analysis over fundamental analysis for
short-term decision-making is best explained by:
A. Technical analysis ignores market sentiment entirely
B. Technical analysis always predicts exact price targets
C. Technical signals tend to reflect and react to changing market conditions more promptly
than fundamental data
D. Fundamental data updates more frequently than price
Correct Answer: C
Rationale: Price adjusts continuously as new information is absorbed, so technical analysis can
capture shifts in supply and demand sooner than fundamentals, which are reported periodically
and lag real-time market action.
Questions with 100% Verified Correct Answers
Chartered Market Technician (CMT) Association Level 1 Assessment | Expert-Verified
Q&A | Certification-Ready Format
This 2026/2027 Chartered Market Technician (CMT) Association Level 1 evaluation document
consolidates one hundred and thirty-two (132) multiple-choice items drawn from the
foundational domains of technical analysis and the financial markets. It emphasizes the critical
integration of chart construction, trend analysis, technical indicators, momentum oscillators,
market theories (including Dow Theory, Elliott Wave, and Wyckoff), and behavioral finance to
ensure a thorough command of technical analysis methodologies. Every item has been expert-
verified with fully correct answers and detailed rationales, designed for accurate self-evaluation
and certification-level readiness. The assessment reflects current financial market standards and
the 2026/2027 CMT Association Level 1 curriculum, providing candidates with a rigorous
framework for evaluating comprehension of price action, market structure, and the proven
methodologies that underpin disciplined technical analysis.
Content Area Overview
Content Area Questions Key Topics Weight
Theory and History of 13 Core assumptions, 10%
Technical Analysis technical vs. fundamental
analysis, history, Dow
origins, market efficiency
Charting, Trend Analysis & 33 Chart types, candlesticks, 25%
Chart Patterns trendlines,
support/resistance,
reversal & continuation
patterns, gaps
Momentum Indicators, 27 SMA/EMA/WMA, MACD, 20%
Oscillators & Moving RSI, stochastic, Bollinger
Averages Bands, ADX, ATR, CCI,
Williams %R, MFI
Volume, Breadth, and 20 Volume principles, OBV, 15%
Market Internals A/D line, advance/decline
line, TRIN, McClellan,
put/call, VIX, open interest
Market Theories: Dow, 20 Dow tenets, three trends, 15%
Elliott Wave, & Wyckoff impulse/corrective waves,
Fibonacci,
accumulation/distribution,
springs
Behavioral Finance, Risk 19 Loss aversion, biases, 15%
Management & prospect theory, position
Performance sizing, risk/reward,
Sharpe, drawdown,
correlation
Total 132 All 2026/2027 CMT 100%
Association Level 1
content domains
Examination Questions
,Domain: Theory and History of Technical Analysis (10%)
1. Technical analysis is founded on which of the following core assumptions?
A. Price reflects all known market information, prices move in trends, and history tends to
repeat itself
B. Intrinsic value always converges with market price over short horizons
C. Markets are perfectly efficient and price changes are completely random
D. Earnings reports are the primary driver of all price movement
Correct Answer: A
Rationale: The three pillars of technical analysis hold that (1) market price discounts
everything, (2) prices move in persistent trends, and (3) market behavior, rooted in human
psychology, tends to recur in recognizable patterns.
2. Which statement best captures the central distinction between technical and
fundamental analysis?
A. Technical analysis is limited to daily charts, while fundamental analysis applies only to
weekly charts
B. Technical analysis studies market action itself, while fundamental analysis studies the
underlying economic and financial drivers of value
C. Technical analysis is valid only for commodities, while fundamental analysis applies only
to equities
D. Technical analysis relies exclusively on earnings, while fundamental analysis uses price
Correct Answer: B
Rationale: Technical analysis studies the supply-and-demand action reflected in price, time,
and volume, whereas fundamental analysis evaluates economic, sector, and company-level
factors to estimate intrinsic value.
3. Charles Dow is most closely associated with which foundational contribution to
technical analysis?
A. The development of the Japanese candlestick method
B. The articulation of Dow Theory and the creation of the Dow Jones Industrial and Rail
averages
C. The invention of the relative strength index (RSI)
D. The formulation of Elliott Wave Principle
Correct Answer: B
Rationale: Charles Dow, co-founder of the Wall Street Journal, articulated the principles later
named Dow Theory and established the Industrial and Transportation averages that remain
central to market structure analysis.
4. The assumption that 'price discounts everything' most directly implies that:
A. All known information, expectations, and sentiment are already reflected in the current
market price
B. Price can never deviate from fair value
C. News events have no measurable effect on price
D. Technicians should ignore all fundamental data because it is irrelevant
Correct Answer: A
,Rationale: This assumption means the technician studies price action itself as the most complete
and current summary of all market information, expectations, and participant sentiment,
without needing to re-derive value from fundamentals.
5. Which concept challenges technical analysis by asserting that past price
movements cannot be used to predict future prices?
A. Elliott Wave Principle
B. The Random Walk Theory
C. Dow Theory
D. Wyckoff's Law of Cause and Effect
Correct Answer: B
Rationale: Random Walk Theory holds that successive price changes are independent and
unpredictable, asserting that historical price data carries no predictive value, a view
technicians contest by identifying recurring, exploitable patterns.
6. The Efficient Market Hypothesis in its strongest form asserts that:
A. Prices reflect only historical trading data
B. Prices reflect all information, both public and private, leaving no room for persistent
excess returns
C. Prices fully reflect all publicly available information
D. Markets are efficient only during periods of low volume
Correct Answer: B
Rationale: Strong-form EMH claims prices reflect all information, public and private, so even
insider information cannot generate abnormal returns; technicians counter that market
inefficiencies and behavioral patterns create recurring opportunities.
7. Who is credited with introducing Japanese candlestick charting techniques to the
Western financial community?
A. Richard Wyckoff
B. Welles Wilder
C. R.N. Elliott
D. Steve Nison
Correct Answer: D
Rationale: Steve Nison is widely credited with popularizing Japanese candlestick techniques in
the West through his writings and instruction in the late 1980s and early 1990s, translating
centuries-old methods from Japanese rice traders.
8. Point and figure charting is historically distinguished by its emphasis on:
A. Price changes of a defined magnitude while disregarding the passage of time
B. Time as the primary axis of analysis
C. Intraday tick-by-tick movement only
D. Daily closing prices plotted with volume
Correct Answer: A
Rationale: Point and figure charts filter insignificant movements by plotting price reversals of a
set box size, ignoring time entirely, which sharpens focus on significant supply-and-demand
shifts and clean trendlines.
, 9. The philosophical basis of technical analysis draws most heavily upon which
academic discipline to explain recurring chart patterns?
A. Pure macroeconomic accounting
B. Astrology and celestial cycles
C. Quantum mechanics
D. Behavioral psychology and the study of crowd behavior
Correct Answer: D
Rationale: Recurring patterns are attributed to consistent human psychological responses and
crowd behavior; because market participants react to similar conditions in similar ways,
recognizable formations tend to repeat across time.
10. A technician primarily defines the market's prevailing condition by analyzing:
A. The most recent earnings report
B. The slope of the GDP growth curve
C. Central bank policy statements only
D. Price action, including trend, support, resistance, and volume
Correct Answer: D
Rationale: Technicians read the market's condition directly from price action and its associated
volume, deriving trend, momentum, and structure from the market's own behavior rather than
external economic variables.
11. Which of the following is a defining characteristic that makes technical analysis
broadly applicable across markets?
A. It applies only to stocks listed on a single exchange
B. It requires exclusive access to order flow data
C. It functions solely during bull markets
D. Its principles are market-agnostic, applying to any instrument where price is driven by
supply and demand
Correct Answer: D
Rationale: Because technical analysis studies the universal mechanics of supply and demand
reflected in price, its methods transfer across equities, futures, forex, commodities, and other
freely traded instruments.
12. The comparative advantage of technical analysis over fundamental analysis for
short-term decision-making is best explained by:
A. Technical analysis ignores market sentiment entirely
B. Technical analysis always predicts exact price targets
C. Technical signals tend to reflect and react to changing market conditions more promptly
than fundamental data
D. Fundamental data updates more frequently than price
Correct Answer: C
Rationale: Price adjusts continuously as new information is absorbed, so technical analysis can
capture shifts in supply and demand sooner than fundamentals, which are reported periodically
and lag real-time market action.
