[UPDATED Mar-2026] Best Value Available Preparation Guide for CMT-Level-I Exam
1 Full CMT-Level-I Practice Test and 409 Unique Questions, Get it Now!
NEW QUESTION # 32
In a doji candlestick:
- A. Supply exceeds demand
- B. Supply and demand are in balance
- C. Demand exceeds supply
- D. All the above
Answer: B
Explanation:
Detailed Explanation:
A Doji is formed when the opening price and the closing price are virtually identical. This indicates that neither the bulls (demand) nor the bears (supply) were able to gain control by the end of the session, signaling that supply and demand are in balance (indecision).
NEW QUESTION # 33
Violated support levels typically:
- A. Are associated with declining price projections
- B. Become support levels as prices fall lower
- C. Become resistance levels on price bounces138
- D. Indicate an imminent price reversal139
Answer: C
Explanation:
Detailed Explanation:141
This is the principle of Polarity. Once a support level is broken, the market142 psychology shifts. Investors who bought at support are now losing money and will look to sell if the price rallies back to "break even." Thus, the broken support becomes resistance.
NEW QUESTION # 34
What is the measuring objective for flags and pennants on bar charts?
- A. Half the distance from the beginning of the sharp trend to the first reversal and adding it to the breakout price
- B. The distance from the beginning of the sharp trend to the first reversal and adding it to the low price in the formation
- C. Half the distance from the beginning of the sharp trend to the first reversal and adding it to the low price
- D. The distance from the beginning of the sharp trend to the first reversal and adding it to the breakout price
Answer: D
Explanation:
Detailed Explanation:
Flags and Pennants are "half-mast" patterns. The target is calculated by measuring the pole (distance from the start of the trend to the first reversal) and adding that entire distance to the breakout price20.
NEW QUESTION # 35
Which group of the following may be termed as the key to making money?
- A. Studies, Discipline, risk control and non-leveraged positions
- B. Objectivity, flexibility, discipline and risk management
- C. Objectivity, Analysis, Discipline and risk management
- D. Subjectivity, research, discipline and risk management
Answer: B
Explanation:
Detailed Explanation:
Successful trading requires Objectivity (seeing the market as it is), Discipline (following the plan), and Risk Management (controlling losses). Flexibility is also crucial to adapt when market conditions change. Rigidity (lack of flexibility) is often cited as a cause of failure.28
NEW QUESTION # 36
When using a moving average crossover system to generate buy/sell signals, a SELL signal would be generated when:
- A. The slow rises above the fast
- B. Either A or C
- C. The fast falls below the slow
- D. The slower moving average falls below the faster average
Answer: C
Explanation:
Detailed Explanation:
In a crossover system, the shorter (faster) moving average is more sensitive to recent price changes. A sell signal (often called a "Death Cross") is generated when the fast moving average crosses below the slow moving average.
NEW QUESTION # 37
Treasury inflation-protected securities (TIPS) are bonds whose _______ is adjusted as the consumer price index fluctuates.
- A. Future value
- B. Interest rate
- C. Principal
- D. Discount rate
Answer: C
Explanation:
Detailed Explanation:
For TIPS, the Principal value is adjusted upward with inflation (CPI). The fixed coupon rate is then applied to this adjusted principal, resulting in higher interest payments in nominal terms.
NEW QUESTION # 38
During a consolidation phase, price action normally:
- A. Moves within well-defined neutral boundaries on high volume505152
- B. Attempts a breakout within three weeks
- C. Attempts a breakout within three months
- D. Moves within well-defined neutral boundaries on low volume474849
Answer: D
Explanation:
Detailed Explanation:565758
Consolidation represents a pause in the trend. Prices typically move sideways within a defined range (rectangle/flag) and volume typically contracts (is low) as traders wait for the next59 directional cue.6061
NEW QUESTION # 39
Oscillators are normally used to:
- A. Identify overbought or oversold market conditions
- B. Identify Elliott Wave cycles
- C. Gauge differentials between buyers and sellers
- D. Identify price/volume divergences
Answer: A
Explanation:
Detailed Explanation:
While oscillators can show divergence, their primary and most common function is to identify overbought (price too high/fast) or oversold (price too low/fast) conditions, suggesting a potential mean reversion or pause in the trend.
NEW QUESTION # 40
For stock market3s to fall:
- A. Ask must chase the bid
- B. Bid must chase the ask
- C. Neither bid or ask should chase the other
- D. Either bid or ask should chase the other
Answer: A
Explanation:
Detailed Explanation:
For prices to decline, sellers must be aggressive and willing to lower their asking price to hit the bids. This action of sellers lowering prices to find buyers is described as the ask chasing the bid.
NEW QUESTION # 41
Calculate the nominal return based on the information provided below:
The S&P 500 index fell 0.003 percent in 2015.
Dividends paid during the year equaled 2.089 percent of the index's value.
Inflation was 3.4 percent.
- A. -1.3%
- B. -2.08%
- C. 1.30%
- D. 2.08%
Answer: D
Explanation:
Detailed Explanation:
Nominal Return is the total return before adjusting for inflation.
Formula: Price Appreciation + Dividend Yield.
Price Change = -0.003%
Dividends = +2.089%
Total Nominal Return = 2.089% - 0.003% = 2.086%.
Rounded to two decimal places: 2.08%.
NEW QUESTION # 42
Which of the following is NOT a momentum indicator?
- A. Trident index
- B. Difference between price and moving average
- C. Difference between two moving averages
- D. Relative strength index
Answer: A
Explanation:
Detailed Explanation:
RSI, MACD (Difference between MAs), and Price-Oscillators (Price minus MA) are all classic momentum indicators. The Trident Index is generally associated with distinct wave analysis or specialized systems, not standard momentum classification in the CMT curriculum context (Note: Trident is often considered a counter-trend or reversal tool, not pure momentum)19191919.
NEW QUESTION # 43
Identify the Elliott Wave pattern highlighted below (Chart showing W-X-Y with sideways movement):
- A. Zigzag
- B. Regular flat
- C. Running flat
- D. Expanded flat
Answer: C
Explanation:
Detailed Explanation:
The chart labeled 104 shows a Running Flat (Wave B makes new high, Wave C fails to break Wave A low).
*Correction*: The chart labeled 104 in the PDF visual actually corresponds to question 105 or is a Running Flat structure. Checking key for 104: Key says B: Running Flat. A Running Flat is characterized by B breaking the high of A, but C *failing* to break the low of A, indicating strong underlying trend strength.
---
NEW QUESTION # 44
To INCREASE the sensitivity of a 5 x 3 point and figure chart, one would:
- A. Both A and C
- B. Increase the number of boxes needed for a reversal
- C. Decrease the box size
- D. Increase the box size
Answer: C
Explanation:
Detailed Explanation:
Sensitivity in P&F charts refers to how quickly the chart reacts to price changes.
* Decreasing the box sizemeans smaller price moves are recorded, making the chart more sensitive to minor fluctuations.
* Increasing the box size or reversal amount filters out more noise, making itlesssensitive.
NEW QUESTION # 45
The Dow Theory uses ONLY:
- A. Closing prices
- B. All of the above
- C. Low prices
- D. High prices
Answer: A
Explanation:
Detailed Explanation:
As established in previous questions, Charles Dow believed the closing price was the most psychologically significant price of the day, and Dow Theory analysis is based strictly on closing data.
NEW QUESTION # 46
Which of the following is a reversal pattern in candlestick charting?
- A. Gapping side-by-side white lines
- B. Windows
- C. Rising three methods
- D. Three black crows
Answer: D
Explanation:
Detailed Explanation:
Three Black Crows is a bearish reversal pattern consisting of three consecutive long black candles closing near their lows. Windows, Rising Three Methods, and Side-by-Side lines are all continuation patterns.
NEW QUESTION # 47
Which of the following would MOST likely be a continuation pattern?
- A. Head and shoulders
- B. Flag
- C. Engulfing pattern
- D. Double bottom
Answer: B
Explanation:
Detailed Explanation:
A Flag is a classic short-term continuation pattern. It represents a brief pause or consolidation in a dynamic trend (the "pole") before the trend resumes in the original direction. Engulfing patterns, Head and Shoulders, and Double Bottoms are all reversal patterns.
NEW QUESTION # 48
Lower-priced securities tend to have greater ATR (Average True Range) than higher-priced securities.
- A. False
- B. True
Answer: A
Explanation:
Detailed Explanation:
False. ATR is an absolute volatility measure in points/dollars. A $100 stock moving 1% moves $1.00. A $10 stock moving 1% moves $0.10. Therefore, higher-priced securities typically have higher absolute ATR values than lower-priced ones.2930
NEW QUESTION # 49
Which is the weakest part of a trading system?
- A. The oscillators
- B. The trader
- C. The system
- D. Price patterns
Answer: B
Explanation:
Detailed Explanation:
The human element-the trader-is widely considered the weakest link due to psychological factors like fear, greed, lack of discipline, and the inability to stick to the system's rules during periods of drawdown or stress.1
NEW QUESTION # 50
In Point and Figure theory, triple tops and triple bottoms, when breached:
- A. Are false signals
- B. Frequently lead to a consolidation phase
- C. Lead to smaller continuation patterns
- D. Will lead to a stronger price move
Answer: D
Explanation:
Detailed Explanation:
A Triple Top involves three tests of resistance before breaking out. This repeated testing builds up "Cause" (energy).
Therefore, when breached, it will lead to a stronger price move than a simple double top breakout50.
NEW QUESTION # 51
......
Get Instant Access to CMT-Level-I Practice Exam Questions: https://testking.guidetorrent.com/CMT-Level-I-dumps-questions.html