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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

The Efficient Market Hypothesis assumes that:

I. Most investors will act rationally

II. Most investors will act irrationally

III. Prices typically reflect all available information

IV. Prices typically do not reflect all available information

A.

I & III

B.

I & IV

C.

II & III

D.

II & IV

What is the importance of time in interpreting the saucer and peak patterns?

A.

Longer time periods increase the signaling importance of saucers but not of peaks

B.

Saucer bottoms are more valid when they form over a short time period

C.

Long time periods between market peaks and troughs reduce the potential for a market reversal

D.

Longer formation time periods increase the signaling importance of both saucers and peaks

The Sharpe Ratio is defined as?

A.

(expected return plus the risk free interest rate) divided by the standard deviation of returns

B.

(expected return minus the risk free interest rate) divided by the standard deviation of returns

C.

(expected return divided by the risk free interest rate) divided by the standard deviation of returns

D.

(expected return times the risk free interest rate) divided by the standard deviation of returns

A breakout:

A.

Is a minor pattern which is rarely seen and has no real significance on either the near or long term

B.

Occurs when price passes through specific levels

C.

Has no significance to a trader of investor

D.

Needs to be confirmed by other indicators

Which market tends to have the GREATEST amount of volatility?

A.

Bonds

B.

Currencies

C.

Eurodollars

D.

Equities

Which of the following is NOT true of chart patterns?

A.

Speculators' habits have recurring impacts on markets and knowledge of this fact can be used to interpret chart patterns

B.

Trading techniques found in trading literature may be a cause of repeated patterns

C.

A price chart is a representation of human behavior

D.

Quantitative studies have shown a direct relationship between market psychology of behavior and chart formations

Which of the following is true of the harami pattern?

A.

It is the opposite of the engulfing pattern

B.

It is considered a continuation pattern

C.

The color of the real body is of utmost importance to its significance

D.

All of the above

Which of the following is a CORRECT interpretation of the shooting star pattern?

A.

It is even more bearish than the gravestone doji candle

B.

Shooting stars in charts, as in life, are omens of good fortune

C.

The color of the real body is of utmost importance to its significance

D.

It is a bearish reversal pattern

Which of the following would provide the least help to a trader who is trying to determine where to place a stop order?

A.

ATR

B.

Parabolic SAR

C.

TRIN

D.

Pivot Point Technique

_______________ as a risk measure results in an estimation of a price move in either direction.

A.

Put/ call parity

B.

Plurality index

C.

Implied volatility

D.

Standard deviation

Based on the chart given below; identify the best course of action:

A.

Shares are losing momentum which can be confirmed by negative divergence between price and ROC; trader should be cautious and be quick to reduce position on a violation of trendline.

B.

Shares are making a series of higher highs and higher lows; ROC has turned negative which is confirming the price action; should use current pullback to add to position.

C.

ROC has turned negative which is a sell signal; should initiate a short position.

D.

Negative divergence observed between price and ROC should be ignored as prices are near life time highs.

Tick volume refers to:

A.

the number of contracts traded at each price tick.

B.

the number of contracts traded at each time interval.

C.

the change in open interest during a particular time interval.

D.

the number of recorded price changes during a particular time interval.

This indicator measures the distance between two exponential moving averages of advances minus declines.

A.

TRIN

B.

McClellan Oscillator

C.

Ayres-Hughes Breadth Indicator

D.

The SENTIX Index

A morning star pattern is typically:

A.

A very small pattern consisting of two candles that is infrequently seen

B.

A continuation consisting of at least five candles

C.

A bottom reversal pattern consisting of three candles

D.

A top reversal pattern consisting of three candles

Which of the following would normally be considered a sentiment indicator that is most useful to traders?

A.

Corporate buy backs

B.

Price/earnings ratio

C.

Insider buying

D.

Put/call ratio

Over a period of 4 weeks, a swing trader notices that for a particular security the ADX reading has declined from a high of 45 to a current low of 15. What tool may best help the trader isolate a trading opportunity over the next few days?

A.

A Simple Moving Average

B.

An Oscillator

C.

An Exponential Moving Average

D.

A Linear Regression Line

To calculate moving averages for a point-and-figure chart:

A.

First, make a decision as to how many columns to average.

B.

First, re-draw the chart as a 1X1 chart,

C.

First, find the longest column, and count the number of filled boxes.

D.

First, convert the chart to a conventional line chart.

An MTA Member or Affiliate using the MTA mailing list to send _____________ would not be in violation of the Code of Ethics:

A.

Research reports

B.

A free membership to a club

C.

Charting discount coupons

D.

CMT Newsletter

In point and figure theory, triple-tops and triple-bottoms, when breached:

A.

Lead to smaller continuation patterns

B.

Frequently leads to a consolidation phase

C.

Will lead to a stronger directional move

D.

Suggest a failure in the longer term pattern

What position does the MTA take on plagiarism?

A.

Analysts can never copy other analysts work

B.

Other analysts work can be copied with permission in advance

C.

If the author of the original work is deceased, this work cannot be copied since permission cannot be obtained

D.

Research reports which are not direct copies but use substantially the same language as other analysts work would be permissible

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