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MTA - Market Technicians Association

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1. General Principles Technical Analysis Technical Analysis Glossary Market Theories Market Technicians Association
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MTA - Market Technicians Association

Panel Discussions (Archives) Noted Market Technicians (Biographies) Career Development CMT Prep Materials Journal of Technical Analysis Dow Award 2. Chart Types 3. Chart Patterns 4. Cycle Analysis 5. Sentiment (Behavioral Finance) 6. Flow of Funds 7. Intermarket Analysis 8. Trading Investing Strategies 9. Statistics 10. Indicator Analysis (Trend and Momentum)

CMT Level 1 Sample Quiz Questions (Set 2)


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MTA - Market Technicians Association

Submit Additional Information Tags: CMT, CMT Exam, CMT Quiz Cards, CMT Sample Quiz Questions, Quiz Cards Visits: 6,300 Which of the following describes an equally weighted average? a. An investor invests the same dollar amount in each security b. Is adjusted by a divisor c. Considers the market capitalization of each security in the average d. Is the way the Dow Jones Industrial Average is calculated Answer: a. An investor invests the same dollar amount in each security Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 5. A REASONABLE price objective once a stock has completed a head and shoulders pattern is a. 100% of the previous trend b. Derived using the Fibonacci Ratio c. Equivalent to the distance between the head and neckline d. Depends on the action of the accompanying volume Answer: c. Equivalent to the distance between the head and neckline Reference: Edwards, Robert D. and Magee, John. Technical Analysis of Stock Trends, 9th Edition.Chapter 6. A continuation pattern is a. A pause in the prevailing trend b. Usually a sideways price action c. Usually a near term or intermediate term pattern d. All of the above
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Answer c. All of the above Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 15 A symmetrical triangle is a. Also called a coil b. Usually a continuation pattern c. A temporary pause in the existing trend d. All of the above Answer d. All of the above Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 15 The apex of a triangular pattern is a. The point where two lines meet b. A point that helps to time and measure the potency of the pattern c. An important support or resistance level after the breakout occurs d. All of the above Answer d. All of the above Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 15 Volume should diminish during the price swings within a triangular pattern a. True b. False c. Sometimes
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d. Only on the downside swings Answer a. True Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 15 The breakout from a triangle formation a. Should take place with a sharp increase in volume b. Should take place between two-thirds to three-fourths of the way through the pattern c. Is a price level that immediately becomes support/resistance d. All of the above Answer: d. All of the above Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 15 The descending triangle is just a mirror image of the ascending triangle and is generally considered a ______ pattern a. Bullish b. Bearish c. Continuation d. b and c Answer d. b and c Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 15 All of the following are true of flag and pennant patterns EXCEPT a. They are short term patterns completed in one to two weeks
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b. They are preceded by sharp and nearly straight line moves c. They are characterized by a decrease of volume during the formation of the pattern d. They are reversal patterns Answer d. They are reversal patterns Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 5 The measuring technique for MOST continuation patterns implies that a price objective from the breakout point is equal to the ____ of the pattern at its broadest point a. Width b. Height c. None of the above d. 100% of prior trend Answer b. Height Reference: Pring, Martin J. Technical Analysis Explained. Chapter 5 The reversal pattern that can also appear as a continuation pattern is a. Saucer b. Head and shoulders c. Spike d. Double top Answer b. Head and shoulders Reference: Edwards, Robert D. and Magee, John. Technical Analysis of Stock Trends, 9th Edition. Chapter 6 Stock traders rely heavily on
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a. 4 and 92 day moving averages b. 50 and 200 day moving averages c. 30 and 40 week moving averages d. b and c Answer d. b and c Reference: Pring, Martin J. Technical Analysis Explained. Chapter 9. Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 14 The simple moving average a. Gives equal weight to each periods price b. Gives greater weight to the more recent price c. Assigns greater weight to more recent data and includes all of the data in the life of the instrument d. None of the above Answer a. Gives equal weight to each periods price Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 14 A Channel breakout system works extremely well in a. Trending markets b. Non-trending markets c. Daily and weekly charts and monthly charts d. a and c Answer: d. a and c Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 12

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The moving average a. Follows the trend b. Is a smoothing device c. Lags market action d. All of the above Answer: d. All of the above Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 14 The crossover method refers to a. Buying the same security high and selling it low twice in the same day b. Taking the buy/sell recommendations of a fundamental analyst c. A buy or sell signal generated when a shorter moving average crosses a longer moving average d. a and b Answer c. A buy or sell signal generated when a shorter moving average crosses a longer moving average Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 14 The most commonly used price to calculate the moving average is the a. High b. Low c. Midpoint d. Close Answer d. Close
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Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 14 In a 10-day simple moving average, each days price is assigned a weighting of a. 1% b. 5% c. 10% d. 20% Answer c. 10% Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 14 Which moving average(s) assign GREATER weight to the most recent data? a. Simple b. Weighted c. Exponential d. b and c Answer d. b and c Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 14 Longer-term moving averages a. Give fewer buy and sell signals b. Are better at giving signals at major tops c. Give back a lot more when the trend reverses d. a and c
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Answer d. a and c Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 14 Shorter moving averages a. Produce more trades b. Produce fewer whipsaws c. a and b d. None of the above Answer a. Produce more trades Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 14 To help confirm a price trend, volume should expand a. On a reversal day b. On a strong close c. In the direction of the trend d. When a price target is met Answer c. In the direction of the trend Reference: Pring, Martin J. Technical Analysis Explained. Chapter 5 Volume divergence occurs when a. Volume expands while open interest contracts b. Volume expands while the daily trading range contracts c. A new high in an uptrend takes place on declining volume d. Volume declines during a sideways congestion pattern
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Answer c. A new high in an uptrend takes place on declining volume Reference: Pring, Martin J. Technical Analysis Explained. Chapter 23 On a head and shoulders top, the head is typically made on a. Active volume b. Light volume c. Breakout volume d. Normal volume Answer b. Light volume Reference: Edwards, Robert D. and Magee, John. Technical Analysis of Stock Trends, 9th Edition. Chapter 6 Volume in a head and shoulders pattern is HIGHEST where? a. At the top of the head b. At the completion of the head c. During the right shoulder d. During the left shoulder Answer c. During the left shoulder Reference: Edwards, Robert D. and Magee, John. Technical Analysis of Stock Trends, 9th Edition. Chapter 6 Triangle price patterns should be accompanied by a. Active volume within the pattern b. Heavier volume in the direction of the eventual breakout c. A gradual drop-off in volume until the breakout d. No discernible difference in volume until after the breakout occurs Answer c. A gradual drop-off in volume until the breakout
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Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 15 Technicians believe that a. Price precedes volume b. Volume precedes price c. Volume and price are typically coincident indicators d. Volume matters most during breakouts Answer b. Volume precedes price Reference: Pring, Martin J. Technical Analysis Explained. Chapter 5 A selling climax a. Typically occurs at a market top b. Typically occurs at a market bottom c. Is accompanied by average to low volume d. Indicates new shorts getting trapped at the bottom Answer b. Typically occurs at a market bottom Reference: Pring, Martin J. Technical Analysis Explained. Chapter 22 Open interest is a. The number of contracts traded in a day b. The number of outstanding contracts in any given day c. The sum of total volume and open interest d. None of the above Answer: b. The number of outstanding contracts in any given day
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Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 18 The primary use of candlestick patterns is to a. Define the intermediate and short-term trends, but not the primary trend b. Define the primary, intermediate, and short-term trends c. Strengthen the possibility of a reversal or continuation of a price trend d. Determine if you are in a bull market or a bear market Answer c. Strengthen the possibility of a reversal or continuation of a price trend Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 17 Which is an example of candle pattern filtering? a. Accepting only those patterns that fit the strict definition of their pattern b. Accepting only those patterns that are confirmed by the intermediate trend c. Using western techniques to confirm a candle pattern d. Using cycles to confirm the existence of a pattern Answer c. Using western techniques to confirm a candle pattern Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 11 Which tools could you use in candle pattern filtering? a. Cycles b. Point and Figure chart c. RSI and MACD d. Dow Theory
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Answer c. RSI and MACD Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 17 The analysis of cycles provides a. An objective determination of trend reversal b. An indication of time duration of a trend c. Relative strength of related price indices d. An approximation of price support Answer b. An indication of time duration of a trend Reference: Pring, Martin J. Technical Analysis Explained. Chapter 21 For a futures contract, daily volume represents a. The dollar volume of the contracts traded b. The cumulative price change for the day c. The number of contracts traded during the day d. The open interest at the end of the day Answer c. The number of contracts traded during the day Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 18 Flow of fund analysis relies in part a. On the sentiment of investment advisory services b. On monthly price movements of the Dow Jones Industrial Average c. On market volume statistics d. On measuring the cash position of different investor groups
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Answer: d. On measuring the cash position of different investor groups Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 10 A momentum index measures a. Investor sentiment b. Investor psychology c. The rate of change of prices d. Absolute volume level Answer c. The rate of change of prices Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 18 A simple moving average a. Is a cumulative breadth measure b. Is constructed from various randomly selected interviews of retail investors c. Seldom changes in value d. Is constructed by totaling a set of data and dividing that total by the number of observations Answer: d. Is constructed by totaling a set of data and dividing that total by the number of observations Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 14 The objective of the Dow Theory is to determine a. Changes in market psychology b. The likelihood of volume reversals c. The primary direction of the stock market
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d. Timing of market bottoms Answer c. The primary direction of the stock market Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 6 Oscillators are normally used to a. Identify overbought or oversold market conditions b. Identify price/volume divergences c. Identify Elliott Wave cycles d. Gauge differentials between buyers and sellers Answer: a. Identify overbought or oversold market conditions Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapters 8 and 18 Relative strength analysis, as applied in equity analysis relates a. Volume changes to price changes b. Unsophisticated investor behavior to price cycles c. Changes in security prices in relation to other security prices, group price indices or market action d. Rate of price change of 4, 13 and 42 weeks Answer c. Changes in security prices in relation to other security prices, group price indices or market action Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 18 The resistance level of a price trend refers to a. The level under the market where buying interest is
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sufficiently strong to overcome selling pressure b. The level over the market where selling pressure is sufficiently strong to overcome buying pressure and a price advance is expected to be turned back c. The boundaries of the trading range of the trend d. The target price indicated by the count Answer b. The level over the market where selling pressure is sufficiently strong to overcome buying pressure and a price advance is expected to be turned back Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 12 To measure an overbought or oversold market level, a technical analyst would normally a. Look for moving average crossovers b. Look for a series of exhaustion gaps c. Use one or more price oscillators d. Look for price and volume divergences Answer d. Look for price and volume divergences Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 18 Accumulation normally occurs a. Near a market bottom b. Near a market top c. In declining markets d. After a completed trading range Answer a. Near a market bottom
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Reference: Pring, Martin J. Technical Analysis Explained. Chapter 5 The Kondratieff cycle extends for a period of about a. 13 weeks b. 13 years c. 54 weeks d. 54 years Answer d. 54 years Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 19 The Public/Specialist Short Sales Ratio is used as a tool that a. Shows the difference between sophisticated money and unsophisticated money b. Shows the growth in money flow produced by NYSE specialists c. Measures contrary opinion d. Has become obsolete due to derivative product trading Answer: a. Shows the difference between sophisticated money and unsophisticated money Reference: Pring, Martin J. Technical Analysis Explained. Chapter 26 Blow-offs are identified a. Near market bottoms b. By observing a sharp rally in prices after a long advance accompanied by a sharp increase in trading activity c. By observing a sudden sharp drop in prices after a long decline accompanied by heavy trading activity d. Using techniques of cycle analysis Answer b. By observing a sharp rally in prices after a long advance accompanied by a sharp increase in trading activity
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Reference: Edwards, Robert D. and Magee, John. Technical Analysis of Stock Trends, 9th Edition.Chapter 10.1 A selling climax is identified a. By observing converging cycle patterns b. By observing divergence between market breadth and volume c. By observing sharply rising prices d. None of the above Answer d. None of the above Reference: Edwards, Robert D. and Magee, John. Technical Analysis of Stock Trends, 9th Edition.Chapter 10. A breakaway gap usually a. Occurs during the accumulation phase of a market cycle b. Signals the beginning of an important price move c. Provides a major divergence signal d. Occurs at the end of an important price move Answer: b. Signals the beginning of an important price move Reference: Edwards, Robert D. and Magee, John. Technical Analysis of Stock Trends, 9th Edition.Chapter 12 Price cycles are normally measured by a. Their amplitude b. Their period c. Their phase d. All of the above Answer d. All of the above
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Reference: Pring, Martin J. Technical Analysis Explained. Chapter 21

Comments
Vinayak Parmar 8/14/11 @ 02:14 am 5/5 Stars. price cycle are measured by pahse period and amplitude Yan Zhang 9/29/11 @ 08:40 am Open interest is a. The number of contracts traded in a day b. The number of outstanding contracts in any given day c. The sum of total volume and open interest d. None of the above Answer: a. The number of contracts traded in a day => should the correct answer be b)? TARUN SURANA 10/3/11 @ 10:08 am @ yan yes answer us b TARUN SURANA 10/3/11 @ 10:08 am @ yan yes answer is b TARUN SURANA
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10/3/11 @ 03:32 pm @ yan yes answer is b Shiv Prakash 10/9/11 @ 04:30 am We see such mistakes on the sample papers which should be rectified fast as it creates confusions among the beginners. Adrian Filip 10/11/11 @ 07:03 am A continuation pattern is a. A pause in the prevailing trend b. Usually a sideways price action c. Usually a near term or intermediate term pattern d. All of the above Answer c. All of the above The text of the answer is correct but the letter is wrong. it should have been d. instead of c. Adrian Filip 10/11/11 @ 07:06 am Volume in a head and shoulders pattern is HIGHEST where? a. At the top of the head b. At the completion of the head c. During the right shoulder d. During the left shoulder Answer c. During the left shoulder The text of the answer is correct; the letter is not. It should have been d.
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Cristian Varga 10/18/11 @ 04:14 am The limited life feature of the contracts poses some problems for futures traders which stock traders do not face. This is due to: a. The very high volatility related to the futures markets, which results in a lot of whipsaws b. The average futures contract has a trading life of about a year and a half only c. Futures markets are normally more risky than equity markets d. a and b Cristian Varga 10/18/11 @ 04:19 am can anyone help on the question above? if i remeber correctly the correct answer in the MTA booklet is B. can anyone explain this question to me.I know the life of a futures contract is 4 months or 1 month.That`s why there are 4 rollovers every year on some exchanges and 12 on other excahnges. Mahendra Singh 10/20/11 @ 01:01 am It his correct? To measure an overbought or oversold market level, a technical analyst would normally a. Look for moving average crossovers b. Look for a series of exhaustion gaps c. Use one or more price oscillators d. Look for price and volume divergences Answer d. Look for price and volume divergences ANKIT NARSHANA 10/20/11 @ 02:56 am I guess answer should be C) use one or more price ocillators
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Erik Tatje 10/20/11 @ 04:21 pm Ya, that question appears in Level 1 Booklet A as well (#137) and the booklet says the correct answer is C, which makes the most sense. Mahendra Singh 10/21/11 @ 12:10 am Thanks, that's what i thought. They should try correcting some of these errors on this entry. Ayman Khalaf 10/21/11 @ 09:05 pm for mahendra d is correct as he says the market not astock and the question is based on the idea that say when prices make arecord price (low or high) on low volume its accumulation or distribution Michael Schmidt 10/22/11 @ 12:18 am These questions that are printed incorrectly really need to be fixed. The purpose of having this resource is to help with the testing process and this really brings in a level of doubt. The comments section however is a very good way of capturing such errors. Mahendra Singh 10/22/11 @ 03:26 am @Ayman Khalaf: so in this case the Level 1 Booklet A is incorrect? I am of the opinion the answer should be C. Oscillators can be used to gauge OB/OS conditions against markets/indices as well. Divergence i think generally serves as warning that either the bulls or bears (the trend) are weakening and i don't think has great relevance really to a market being overbought or oversold...yes divergence can and is often observed in overbought or oversold markets, but they can also be seen in sideways markets as well. Mahendra Singh 10/22/11 @ 03:39 am i think if the question was phrased "to gauge the likelihood of a reversal in an overbought or oversold market, a technical analyst would normally...",
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then "d. Look for price and volume divergences" would be more correct. Daniel Kuczero 10/22/11 @ 10:46 am I have also found errors in the sample tests... Someone should get these corrected immediately. I took the sample exams and answered correctly, but the answer code had the correct answer but mislabeled with the wrong letter! This will undoubtedly add confusion to newcomers. Daniel Kuczero 10/22/11 @ 10:47 am ....and regarding the futures contracts having an average life of 1.5 years-I don't get that either. I have traded futures and clearly there are several contracts throughout the year (depending on the market traded) and I don't understand the logic in that answer.... Christian Peterson 2/28/12 @ 04:37 pm Shorter moving averages a. Produce more trades b. Produce fewer whipsaws c. a and b d. None of the above Answer a. Produce more trades Shorter moving averages do not produce more trades. They produce more trading signals. Harshad Mane 4/30/12 @ 01:26 pm Open interest is the number of outstanding contracts Add your comments:
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comment

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