CMT-Level-II Exam Training Practice Tests (CMT Association CMT Level II)]

Question 1

Which of the following is not a disadvantage of the patterns that are formed by Broadening formations?

A. They are relatively common in occurrence B. The breakout lines are moving permanently away from each other C. They are hard to make the most of the profit D. They are often difficult to identify

Correct Answer: A

Question 2

If we increase the sample size what effect does it have on the approximation/outcome of the statistical tests?

A. The approximation will improve B. The approximation will decrease C. The approximation will not improve D. It has no effect on the approximation

Correct Answer: A

Question 3

Which of the following is NOT a valid trading rule using Elliott Wave Theory?

A. Identify a main trend B. Draw trendlines to determine direction C. Determine the current status of the main trend by locating the major peaks and bottoms D. Look for five wave corrections and three wave sub-trends or extensions

Correct Answer: D

Question 4

Which of the following is a CORRECT usage of oscillators in technical analysis?

A. Oscillators are least useful when they reach an extreme reading near the upper or lower ends of their boundaries B. Divergences between price and oscillators are important confirmation signals C. When an oscillator crosses the zero line, it provides an important trading signal in the direction of the trend D. All of the above

Correct Answer: C

Question 5

Which of the following is true of Wilder's Parabolic System?

A. It only works for trending markets B. It is a time/price reversal system C. It always in the market D. All of the above

Correct Answer: D

Question 6

Which of the following are FALSE statements when describing the Chaikin Money Flow Index?

A. Gaps will not be recorded, as the index only uses the day high, day low, and closing price. B. It suffers from the "drop off" effect, as it uses a simple moving average. C. The index will rise above zero in an upward trend D. It measures deviations of price within two standard deviations of the range.

Correct Answer: D

Question 7

Which of the following methods is not used to portray the volume of trade?

A. Equivolume B. Leaf and stem C. Bar/candle D. Point-and-Figure

Correct Answer: B

Question 8

Which of the following is true of the separating lines pattern?

A. The top of the upper shadow of one candle is at the same price as the bottom of the lower shadow of the other candle B. The two candles have the same color C. The opening price of the second candle equals the opening price of the first candle D. It is a reversal pattern

Correct Answer: C

Question 9

What is the proper use of long-term charts versus daily price charts?

A. Long-term charts allow for a better assessment of the price trend B. Daily price charts allow for a thorough trend analysis C. Long-term charts are more useful for making trading decisions D. Daily price charts allow for a better assessment of the price trend

Correct Answer: A

Question 10

Based on the chart below, interpret the on balance volume (OBV) indicator with respect to price action:

A. Prices are higher but OBV is sideways which can't be interpreted. B. Positive divergence between price and indicator suggest uptrend is weak and near reversal. C. Prices are consolidating but OBV direction has turned higher which indicates accumulation by long term traders. D. Negative divergence between price and indicator suggest distribution is taking place at top.

Correct Answer: D

Question 11

Which of the following conditions is an absolute must for a true divergence based on the MACD histogram?

A. Confirmation from the MACD fast line and signal line B. Breaking of the centerline C. The MACD histogram has to record atleast a 200 bar low/high on the first trough/peak D. Price action extended above/below the 26 week moving average

Correct Answer: B

Question 12

Which of the following is a true statement according to Elliott Wave Theory?

A. The theory works best in commodity markets traded primarily by professional traders such agricultural futures B. The theory was originally applied to individual stocks and does not work as well for indices C. Wave four should not overlap wave one D. The theory is composed of time, ratios and wave forms, in that order of importance

Correct Answer: C

Question 13

Which of the following MUST be adhered to in published or written analytical reports?

A. Statements may not indefensibly disparage the work of other analysts B. Statements must be consistent with the accumulated knowledge of technical analysis C. Statements must be consistent with available evidence D. All of the above

Correct Answer: D

CMT Association CMT Level II - CMT-Level-II Exam Practice Test