[Jun 26, 2026] Fully Updated Dumps PDF - Latest CMT-Level-I Exam Questions and Answers
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Achieving the CMT Level I certification is a significant accomplishment for financial professionals looking to enhance their technical analysis skills and advance their careers. CMT Level 1 Exam certification is highly respected in the finance industry and is recognized globally as a standard of excellence in technical analysis. With the CMT Association's commitment to continuing education, CMT Level I holders are encouraged to continue their education and pursue advanced certifications to further their professional development.
NEW QUESTION # 199
Alex found that Visha Tech stock had given a buy signal on 10 minute chart but sell signal on hourly chart.
End of the day charts are neutral. What action would be most appropriate in this condition?
- A. Do not trade the stock
- B. Buy the stock with a tight stop loss
- C. Buy the stock but keep the stop loss slightly more away
- D. Short sell the stock
Answer: A
Explanation:
Detailed Explanation:
Conflicting signals across multiple timeframes (Buy on short-term, Sell on intermediate, Neutral on long- term) indicate a lack of clear trend or consensus. The most prudent technical action is to stand aside (do not trade) until the timeframes align or a clear signal emerges.
NEW QUESTION # 200
Which of the following is a TRUE statement according to Elliott Wave Theory?
- A. The two types of simple corrective processes are zigzags and flats
- B. Corrections take place in five wave patterns
- C. A cycle is 3 waves
- D. A trend divides into three waves in the direction of the next longer trend
Answer: A
Explanation:
Detailed Explanation:
Elliott defined two main families of "simple" corrections:
* Zigzags(5-3-5 structure, sharp).
* Flats (3-3-5 structure, sideways).
Triangles are considered complex or separate. Thus, identifying Zigzags and Flats as the simple types is correct36.
NEW QUESTION # 201
Enrique Perrago, CMT, is an analyst for a large investment management firm. Perrago issued a research report with an initial buy recommendation on Graham Airlines. The report includes an analysis using some very new and controversial methods of technical analysis, along with complete documentation as to the procedure and rationale. Ten minutes after emailing the report to his clients, Perrago buys Graham stock for his mother's account. With respect to the MTA Code of Ethics, Perrago's actions are:
- A. In violation of the Code with respect to both the methodology and the security purchase
- B. In violation of the Code with respect to the security purchase, but not the methodology
- C. Not in violation of the Code
- D. In violation of the Code with respect to the methodology, but not the security purchase
Answer: A
Explanation:
Detailed Explanation:
(Note: The provided answer key states D. Let's analyze why).
* Security Purchase:Front-running. Buying stock 10 minutes after issuance is likely not enough time for clients to act. He must give clients adequate opportunity to act on the recommendation before trading for himself or family (Priority of Transactions).
* Methodology:While innovation is allowed, the Code requires using methods that are generally accepted or proving reasonable basis. Using "very new and controversial" methods might be seen as lacking a "reasonable basis" unless heavily substantiated. The key likely flags both as violations7777.
NEW QUESTION # 202
A simpl103e moving average is often criticized because:104105
- A. It is difficult to calculate
- B. The entire pri108ce time series is used in i109ts calculation
- C. The most recent events are given extra weight106107
- D. Equal weight is given to each point included in the calculation
Answer: D
Explanation:
Detailed Explanation:
The main criticism of the SMA is its "lag" caused by giving equal weight to old data. For example, in a 200- day SMA, the price 200 days ago has the exact same impact on the current average as yesterday's price, which critics argue is unrealistic for dynamic markets.110111
NEW QUESTION # 203
The proper use of long-term charts versus short-term price charts is that:
- A. Daily price charts allow for a thorough trend analysis
- B. Daily price charts allow for a better assessment of the price trend
- C. Long-term charts allow for a better assessment of the price trend
- D. Short-term charts identify the primary trend
Answer: C
Explanation:
Detailed Explanation:
Long-term charts (Weekly/Monthly) filter out daily noise and volatility, providing a clearer perspective on the major trend and significant support/resistance levels. Thus, long-term charts allow for a better assessment of the price trend25.
NEW QUESTION # 204
Which of the following candlestick formations is NOT a continuation pattern?
- A. Rising three methods
- B. Windows
- C. Separating lines
- D. Tweezers
Answer: D
Explanation:
Detailed Explanation:
Windows, Separating Lines, and Rising Three Methods are all continuation patterns. Tweezers (Tops or Bottoms) are reversal patterns indicating a support or resistance level has held.
NEW QUESTION # 205
Which of the following would NOT be considered a support level?
- A. All the above are considered to be support levels
- B. Previous high
- C. Previous low
- D. Trading range
Answer: A
Explanation:
Detailed Explanation:
All the options listed serve as support. A previous low is natural support. A trading range acts as a support zone. A previous high, once broken to the upside, changes its polarity and becomes a support level for future corrections (Polarlity Principle).
NEW QUESTION # 206
An effective way of detrending price data to identify cycles is to:
- A. Use a moving average of the highs/lows over n periods
- B. Use an oscillator and identify extreme levels
- C. Plot a linear regression (best-fit) line through the data midpoint
- D. Divide the closing prices by a moving average of those prices
Answer: D
Explanation:
Detailed Explanation:
To isolate a cycle from the trend, analysts use the "Percentage Deviation from Moving Average" method. By dividing the closing prices by a centered moving average, the trend component is removed (flattened to 1.0 or
0), leaving only the cyclical oscillation around the mean.
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NEW QUESTION # 207
An important feature of the martingale process that makes it an appropriate model for EMH is:
- A. The presence of price return anomalies that are unexplained
- B. The absence of price return anomalies that are unexplained
- C. The absence of future price predictability
- D. The presence of information that aids in future price predictability
Answer: C
Explanation:
Detailed Explanation:
A martingale is a stochastic process where the conditional expectation of the next value, given all prior values, is equal to the current value. In finance/EMH, this implies that price changes are independent and random, meaning there is an absence of future price predictability based on past history (Random Walk).
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NEW QUESTION # 208
To increase the sensitivity of a 5 x 3 point & figure chart, one could:
- A. None of the above would increase the sensitivity of a point and figure chart
- B. Decrease the box size
- C. Increase the number of boxes needed for a reversal
- D. Increase the box size
Answer: B
Explanation:
Detailed Explanation:
Sensitivity refers to how quickly the chart reacts to price changes. Decreasing the box size means smaller price moves will trigger a new box, capturing more detail and making the chart more sensitive to minor fluctuations (though potentially adding noise).
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NEW QUESTION # 209
If the VIX is quoted at 20, it indicates the market is expecting a movement of about ____ percent over the next 30 days.
- A. 5.77
- B. 3.77
- C. 3.33
- D. 5.07
Answer: A
Explanation:
Detailed Explanation:
The VIX represents annualized volatility. To convert to a 30-day (monthly) expected move:
$\text{Move} = \frac{\text{VIX}}{\sqrt{12}}$.
$\frac{20}{3.464} \approx 5.77\%$.
Alternatively, $\frac{\text{VIX}}{\sqrt{252}} \times \sqrt{21 \text{ days}}$.
Rule of thumb: VIX/3.46. 5.77% is the correct calculation.
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NEW QUESTION # 210
According to Robert Rhea's hypotheses:
I. The primary trend is inviolate
II. The averages discount everything
III. Dow Theory is not infallible
IV. Dow Theory is predictable
- A. I, II, III, and IV
- B. I, II, and III
- C. I and II
- D. I and III
Answer: B
Explanation:
Detailed Explanation:
Robert Rhea's interpretation of Dow Theory includes the hypotheses that the primary trend is inviolate (cannot be manipulated), the averages discount everything (EMH), and the theory is not infallible (it is not a crystal ball). However, Dow Theory specifically claims it is not a system for predicting the exact duration or extent of trends, making statement IV incorrect.
NEW QUESTION # 211
Which of the following is CORRECT regarding the shooting star candlestick pattern?
- A. The lack of a rising window makes the pattern more bearish
- B. It is more bearish than the engulfing pattern
- C. It is more bearish than the evening star pattern
- D. The color of the real body is important
Answer: A
Explanation:
Detailed Explanation:
(Note: This answer follows the specific provided source key, although standard theory often prefers a gap
/window. The logic in this specific question bank likely implies that if there is no gap (rising window) separating the star from the previous candle, it signifies an immediate rejection at the highs without the exuberance of a gap, or it serves as a "failed breakout" immediately). Standard Nison theory would usually argue a gap (Star) is stronger, but based on the provided key, D is the intended answer.
NEW QUESTION # 212
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. Depends on the action of the accompanying volume5152
- D. Equivalent to the distance between the head and neckline
Answer: D
Explanation:
Detailed Explanation:5556
The standard measuring technique for a Head and Shoulders pattern is to measure the vertical distance from the top of the head to the neckline57. This distance is then pr58ojected downward (for a top) or upward (for a bottom) from the breakout point.
NEW QUESTION # 213
In constructing a point and figure chart, a new box is added ONLY when:
- A. The price has moved to a new high
- B. The volume confirms the price movement
- C. The price has moved by equal to or more than the specified box size
- D. The price has moved by less than the specified box size
Answer: C
Explanation:
Detailed Explanation:
This reinforces the previous concept. If the box size is $1, a price move of $0.90 is ignored. The chart only updates when the price moves by equal to or more than the box size.
NEW QUESTION # 214
Which of the following statements regarding moving average crossovers is CORRECT?
- A. In a triple crossover trading system buying is signaled when the shortest term moving average crosses over both of the other moving averages
- B. The first crossover in a triple crossover system during an upside reversal is when the shortest-term moving average crosses above both of the other two averages
- C. It is considered bearish when a short term moving average crosses above a longer term moving average
- D. Once a moving average system is optimized, it should be used for trading all markets
Answer: B
Explanation:
Detailed Explanation:
In a triple crossover system (e.g., 4-9-18 day), the trend reversal signal sequence begins when the fastest line (shortest term) reacts first. The first valid crossover signal occurs when the shortest-term moving average crosses above both of the slower averages27.
NEW QUESTION # 215
In relation to the principles of technical analysis, the phrase "patterns are fractal" refers to the assumption that:
- A. Patterns tend to break existing trends
- B. Mandelbrot originated the concept of chart patterns
- C. Pattern analysis is universal and independent of time
- D. Chart patterns found in an intraday chart can generate signals in a daily chart
Answer: C
Explanation:
Detailed Explanation:
Fractal nature means self-similarity. A Head and Shoulders pattern looks and behaves the same whether it appears on a 5-minute chart or a monthly chart. This implies pattern analysis is universal and independent of time (timeframe).
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NEW QUESTION # 216
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