by Vantage Institute Of Financial Markets

Overview, Content & Syllabus

Chartered Market Technician is a professional designation that confirms proficiency in technical analysis of the financial markets.

The objectives of the CMT Program are:

To guide candidates in mastering a professional body of knowledge and in developing analytical skills.

To promote and encourage the highest standards of education and

To grant the right to use the professional designation of Chartered Market Technician (CMT) to those members who successfully complete the Program and agree to abide by the MTA Code of Ethics.

Chartered Market Technician

The Market Technicians Association (MTA) was incorporated as a not-for-profit Association in 1973, but began holding meetings as early as 1971.

At first, the MTA was a New York based group, however, as it became apparent that there were technical analysts all over the globe, the MTA transformed first to a U. S. based and eventually to a global professional Association. Today, MTAs total membership is over 4,500, with members located in80 countries.

The MTA’s CMT program, the industrys gold standard in technical analysis, took years to get off the ground and many people worked hard to make it happen in the second half of the 1980s. The first tests were given and the first CMT’s were granted in 1989.

Who Should Consider CMT?

The CMT designation demonstrates to clients and potential clients, employers and potential employers, and your colleagues and peers that you are a professional in the field of Technical Analysis.

The CMT designation allows you to separate yourself from other professionals in you industry. It is a perfect compliment to your fundamental knowledge of the financial industry.

The Program should be considered by:

Securities dealers

Strategists / Hedge Funds

Market Analysts

Portfolio Managers

Traders / Brokers (Equity / Commodity)

Fund Managers

Individual who seeks career in core finance.

Frequently Asked Questions

These Frequently Asked Questions include information about the CMT exams and program, as well as study advice for all levels, grading information, etc. Please let us know if there is a FAQ that you wish to see answered, as we will update this report from time to time.

Q. What is the length of the exams?

Level 1 2 hours

Level 2 4 hours

Level 3 4 hours

Q. What is the format of the exams?

Level 1 132 multiple choice questions

Level 2 160 multiple choice questions

Level 3 essay the entire exam is worth 240 points and candidates are allowed 240 minutes, so candidates should pace their progress so that they do not spend too much time on minor questions and so that they do allow time for more time consuming questions.

Q. What is required of the candidate in the exams?

Level 1 Primarily definitions, this exam is designed to measure basic, entry-level competence and tests concepts such as terminology, charting methods and ethics.

Level 2 Will include some definitions but will focus on applications of Technical Analysis. Candidates should understand ethics and more complex theories (e.g. Dow Theory, Elliott Wave, Intermarket, etc.).

Level 3 Tests candidates competency in ethics and in rendering technical opinions integrating multiple aspects of technical analysis. Essay responses should be of the quality of technical research published by practicing CMT charter holders.

Q. How study much time does it typically take candidates to prepare for the exams?

Level 1 100 hours

Level 2 140 hours

Level 3 160 hours

Q. How long do candidates have to achieve the requirements of all three levels of the CMT program?

Five (5) years from the date of registration.

Q. Are candidates required to memorize ALL formulas contained in the required readings?

Candidates do not need to memorize ALL formulas; however, a solid understanding of technical indicators such as moving averages and oscillators does require a working knowledge of the formula used to calculate the indicator. Therefore, candidates should memorize the formulas used to construct most widely used technical indicators. You are required to know, understand, and apply statistical formulas; therefore a working knowledge of the formulas and their use as applied to technical analysis would be helpful. The exam does not cover programming of various technical software platforms and any detailed formulas used in constructing trading systems need not be memorized.

Q. Do candidates have to memorize ALL Japanese terms for candlestick charting patterns?

Candidates should know the Japanese terms such as Doji and Harami commonly used by textbook authors. It is also necessary to know the names of patterns identified in the assigned readings. Obscure and infrequently used Japanese terms are not tested.

Q. Is ALL material in suggested readings covered in exams?

No. Each version of the CMT exam is designed to test a representative sample of the body of knowledge. Any given version of the exam will only have a limited number of questions and therefore can only cover a limited amount of material. Therefore, some specific areas may not be covered in exams. Each level of the CMT exam is carefully prepared to ensure that they have the same level of difficulty. Candidates must also be able to retain and build upon prior knowledge.

Q. How are the exams graded?

Level 1 and 2 exams are machine graded since they are multiple choice. The MTA uses the services of Prometric to ensure that exam questions fairly test candidates on the subject matter.

Level 3 exams are graded by experienced CMT charter holders typically including textbook authors, MTA board members and committee chairpersons. Grading is based on a uniform answer key for each question which indicates the information which must be contained in candidates questions and how many points each part of a question is worth. After all exams are graded, all exams which are close to, but below passing level, are completely re-graded to ensure that grading was in compliance with the answer key and that all possible points were awarded.

Q. What is the passing score for each level of the exam?

The passing score is approximately 70%.

Q. Why does the MTA not provide the actual score for passing scores?

There are several reasons for this policy. First, as noted, the final passing score is based on a statistical process so the passing percentage changes from one version of the exam to the next. Second, the MTA has found from experience that providing this information is counter-productive. Candidates have too often repeatedly contacted MTA staff attempting to obtain a CMT charter by arguing about the process, rather than demonstrating a solid understanding of technical analysis through their performance on the exams. The MTA staff has no authority to change exam results and should be spending its time on more pressing matters.

Q. What is the process for challenging a failing score?

Keep in mind that Level 1 and 2 exams are machine graded and double checked for grading accuracy. All borderline Level 3 exams are automatically regraded. For a fee of $100, the MTA will review a candidates CMT 3 [essay] exam. After reviewing, candidates receive personalized feedback indicating problems areas such as which answers were unclear or incomplete.

Q. What are the common mistakes failing candidates generally make on the exams?

Level 1 As this level of the exam is relatively straight forward, it appears that unsuccessful candidates have not sufficiently familiarized themselves with the material covered. Many candidates overlook studying the MTA Code of Ethics as they spend all their study time on the assigned textbooks. Ethics is an important part of all three levels of the CMT exam process.

Level 2 At this level unsuccessful candidates appear not to have developed as complete an understanding of technical analysis as is required. Candidates should understand how various indicators are constructed and how this impacts the interpretation of the indicator. One common mistake is confusing similar terms such as RSI and relative strength.

Level 3 Unsuccessful candidates at this level have not been able to produce coherent essays supporting a technical opinion using multiple technical tools. When answering level 3 questions, consider the style and quality of research reports produced by practicing CMTs.

a) Frequently, candidates will fail to clearly state an opinion when one is clearly required by the question. This causes candidates to lose a significant number of points since, if candidates do not clearly state an opinion, they then are unable to respond to questions asking them to defend this opinion. Remember, many times in technical analysis multiple interpretations are possible and candidates can be awarded points for a variety of opinions on many questions.

b) Candidates also tend to focus only on a portion of a chart and fail to utilize all indicators to demonstrate an ability to integrate multiple aspects of technical analysis. For example, in discussing Elliott Wave counts, candidates often ignore other chart aspects such as oscillators, moving averages and support/resistance levels.

c) Unsuccessful candidates often consistently provide essay answers which are not up to the level of professionalism expected of a CMT charter holder. In order to maintain the quality of the CMT charter, the Accreditation Committee seeks to ensure that successful candidates, who will be awarded the CMT designation, can professionally provide technical opinions in a manner that will be a credit to the entire CMT program.

d) Additionally, candidates at levels 2 and 3 are responsible for all material tested on prior exam levels. For example, Point and Figure charting is typically explained in level 1 readings, but may not be utilized in the level 3 readings. This does not mean that Point and Figure charting is not tested on level 3 and, in fact, the level 3 exam is designed so as to include the maximum number of chart types, and indicators possible.

e) The candidate will be given a chart-booklet on which notations and drawings can be made. These chart-booklets are destroyed at the end of the examination at the test center. Some candidates fail to take advantage of the on-screen charts which, many times, are brighter than the paper charts provided.

Q. What other sources of information should candidates refer to in order to better understand the exam material?

Candidates should refer to textbooks or web sites other than those assigned in the readings if they come across material which they are having difficulty with. Often, an explanation by a different author aids in understanding. The MTA also maintains a forum where CMT candidates can discuss the exam material. Additionally, many candidates have commented that they gained a better understanding of the material by reading all of the assigned textbooks, even if only certain chapters were specifically assigned. One general technical analysis reference source which is often used by candidates is the Encyclopedia of Technical Indicators, Second Edition by Robert Colby, and the MTA Knowledge Base.

Q. Once a candidate completes all three levels of the CMT program, what other requirements are there in order to receive the CMT charter?

Only full members (as opposed to affiliates) of the MTA may be awarded the CMT designation and charter. The MTA member application process is separate from the CMT program. Candidates who have completed the three levels of the CMT program need only demonstrate three years of acceptable work experience rather than the five years normally required. Due to the time consuming nature of the member application process, it is strongly recommended that candidates submit their application for membership as soon as they meet the eligibility requirements and know the 3 MTA members who will sponsor the candidate for member status.

Q. How is the CMT designation actually conferred and when do I receive my physical charter document?

The CMT designation is granted by the MTA Board of Directors. Successful candidates who are full members are recommended to the Board at the next monthly board meeting and a vote is held. You will receive a letter in the postal mail confirming this, and you will also receive a CMT charter certificate. These certificates are ordered annually and mailed to candidates. Candidates may also purchase special CMT charter frames at their own expense from a vendor which provides discounted framing services to MTA members.

Q. Once a CMT charter is awarded, to which requirements must a charter holder adhere?

In order to maintain the CMT designation, you must be a member in good standing of the Market Technicians Association (MTA). This requires you to maintain your member dues and abide by the MTA Code of Ethics.

Q. Under what circumstances can a CMT charter be revoked?

The MTA Board of Directors, acting under the advice of the Ethics Committee, may revoke a members CMT charter for serious violations of the MTA Code of Ethics.

Q. Is there any re-review of the examination, post-grading, that can be provided?

There is no mechanism for a post-grading review of CMT levels one and two, as they are machine scored. For the CMT 3 examination, which is in essay format, we will allow (for a period of 45 days after the candidate receives their score) to have an independent grader perform a review of the examination. Should the candidate opt for this process, it is available for a fee of $100 dollars.

Q. The CMT 3 examinations is a essay format. I do not type well and English is not my native language. As a result, there may be typos or grammar errors on the examination. Is this taken into account as part of the graders scoring process?

The graders of the essay have been specifically told that it is the application of the technical analysis concepts that are being tested, not the typing skills or English grammar used on the examination. No points are deducted for typos or grammar.

Q. How long is the CMT tests maintained on file?

CMT level 1 and 2 examinations are computer scored and maintained as a record for 5 years. CMT 3 examinations, which are essay format, and the graders scoring sheet, is maintained on file for 2 years at the MTA facilities.

Q. Is it possible to have questions on the exam that were not pulled from the suggested reading?

No. The Exam questions are related and derived from the reading assignments. Accompanying each question contained in the item bank is specific reference to the book, author, chapter number and page number. The item coding is confidential to protect the integrity of the exam. In addition, each question is analyzed to ensure that it performs as expected through psychometrics analysis.

Q. How important are the questions on the MTA Code of Ethics

Candidates are required to achieve a minimum passing score of 70% on the Ethics section of the CMT 3 exam. This means that candidates MUST receive passing marks on the other sections of the CMT 3 exam AND attain a passing score of at least 70% on the ethics questions to pass the exam. Candidates that receive passing marks on the other sections of the CMT 3exam but DO NOT attain a score of at least 70% on the ethics questions will not pass the exam and will be required to sit for the entire exam at a later administration of the test. Please consider this decision as you prepare for the upcoming CMT 3 exam.

HOW VANTAGE HELPS YOU?

VANTAGE will provide you sufficient classroom training along with the modern tools to excel in preparations of each level.

Training will be conducted on weekend sessions.

All the training will be imparted by Practicing CMTs.

EXAM INFORMATION LEVEL I

CMT Level I Exam

This is the first level of the Chartered Market Technician program, administered by the Accreditation Committee of the Market Technicians Association (MTA). Its purpose is to promote the development of a candidate’s professional knowledge with respects to the field of technical analysis. Three exam levels must be completed successfully within a 5-year period, and an individual must agree to adhere to the MTA Code of Ethics before CMT certification will be awarded. The first level focuses mainly on basic definitions, charting methods and other entry-level topics.

Exam Information