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CMT-Level-II CMT Association CMT Level II Exam Free Practice Exam Questions (2025 Updated)

Prepare effectively for your CMT Association CMT-Level-II CMT Level II Exam certification with our extensive collection of free, high-quality practice questions. Each question is designed to mirror the actual exam format and objectives, complete with comprehensive answers and detailed explanations. Our materials are regularly updated for 2025, ensuring you have the most current resources to build confidence and succeed on your first attempt.

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Total 262 questions

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

A.

The number of waves follows the Pythagorean theorem

B.

Ratios are used to define price objectives

C.

The rule of alternation states that up waves follow down waves

D.

Bear markets do not fall below the top of the prior fourth wave

How would a technician utilize a support line which has been broken?

A.

A broken support line no longer has a valid technical interpretation

B.

The break in the support line would be a buy signal

C.

The support line now becomes a resistance line

D.

The break in the support line is of no technical importance

All of the following most directly measure internal market strength, EXCEPT:

A.

New Net Highs & New Net Lows

B.

Net Ticks

C.

Arms Index

D.

Consumer Confidence Index

The bias under which, when an event has not occurred recently, the event is perceived as having zero or negligible probability of occurring in future, is categorized as:

A.

Saliency bias

B.

Framing bias

C.

Sunk-cost bias

D.

Anchoring bias

Which of the following would be a valid trading interpretation of head and shoulder chart patterns?

A.

Sell when the right shoulder penetrates the neckline

B.

Buy when the head forms a higher high

C.

Buy on the first rally after the neckline is penetrated

D.

Buy when the right part of the head is forming

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

A.

Identify a main trend

B.

Determine the current status of the main trend by locating the major peaks and bottoms

C.

Look for five wave corrections and three wave sub-trends or extensions

D.

Draw trendlines to determine direction

Speculative stocks put on their best performance in which of the following markets?

A.

During the whole bull market

B.

At the early stages of a bull market.

C.

Near the final stages of a bull market.

D.

Both in the beginning and at the end of a bull market

In trend-based trading systems, what is the major determinant of trading activity (i.e., how often buy or sell signals are generated)?

A.

Smoothing technique used

B.

Distance between bands

C.

Selection of trend speed

D.

Use of a scaling factor

Which of the following patterns resonate with the price action highlighted within the black box marked 'A' & 'B'?

A.

Piercing Line & hammer

B.

Piercing Line & Evening Star

C.

Bullish Engulfing & Shooting Star

D.

Bullish Engulfing & Hanging Man

The MACD Histogram is a/an:

A.

trend-following indicator .

B.

momentum indicator.

C.

breadth indicator.

D.

oscillator

When using the Bar/Candle method to portray volume what is the relationship defined between price and volume using this method?

A.

It has an indirect relationship between price and volume

B.

It has a direct relationship between price and volume

C.

It has no relationship between price and volume

D.

The price is dependent on the volume

Which of the following is NOT a momentum indicator:

A.

Relative strength

B.

Difference between price and moving average

C.

Difference between two moving averages

D.

Trident index

Which of the following is a CORRECT interpretation of volume?

A.

In an uptrend, volume should increase on down days

B.

In a downtrend, volume should increase on up days

C.

Price precedes volume

D.

Volume precedes price

The _______________ tracks the degree of mass participation in rallies and decline.

A.

MACD line

B.

RSI

C.

Relative strength

D.

Advance/Decline line

Which is the CORRECT interpretation of the candlestick hammer pattern?

A.

A hammer always has a black real body

B.

A hammer comes after market rallies

C.

A hammer has no lower shadow

D.

A hammer need not be confirmed by other indicators

All of the following are similar technical indicators, EXCEPT:

A.

Williams %R

B.

Stochastics

C.

Relative Strength Index

D.

The Sentix Index

Which of the following is one of the disadvantages of computerized trading systems?

A.

Trading decisions are less consistent

B.

Most computerized systems are unprofitable in non-trending markets

C.

Profit trades are exited too early

D.

Computerized systems miss many market trends

Which of the following is a valid guideline in using technical analysis to make investment decisions among stock market sectors?

A.

Relative strength analysis allows for identification of the strongest and weakest sectors

B.

Charting tools such as trendlines and moving averages should not be employed with relative strength lines

C.

Sectors whose relative strength lines are just turning up after a downtrend should be sold

D.

This analysis does not hold for options or mutual funds due to the unique characteristics of these securities

Which of the following is a proper technical usage of MACD indicators?

A.

Trendline analysis can be used with MACD

B.

MACD crossover rules are different than other crossover rules

C.

MACD histograms are best used to initiate new positions contrary to the price trend

D.

When the slower MACD line is above the faster line, the MACD histogram will be above zero

Which of the following would be a valid trading interpretation of top chart patterns?

A.

Find a market with a long consolidating base and high volatility

B.

Liquidate positions at prior major resistance points, top formations or the break of a major support line

C.

Sell whenever a major support level is tested but not breached

D.

Sell when there is a major price retrenchment in a bull market

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Total 262 questions
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