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| Section | Weight | Objectives |
|---|---|---|
| Advanced Techniques | 40% | - Statistical Analysis Methods - Systematic Trading Approaches - Cross-Asset and Intermarket Analysis - Risk Management Principles - Volatility Analysis and Measures |
| Application of Technical Analysis | 10% | - Model Evaluation and Implementation - Chart Interpretation for Entry/Exit Decisions - Asset Allocation Using Relative Strength - Risk Assessment and Planning |
| Theory and History | 7% | - Behavioral Finance Principles - Key Concepts in Market Analysis - Evolution of Technical Analysis |
| Ethics and Professional Standards | 3% | - CMT Code of Ethics - Standards of Professional Conduct |
| Classical Techniques | 40% | - Chart Pattern Recognition and Interpretation - Chart Types and Construction - Trend Analysis and Confirmation - Price and Volume Cycles - Internal and External Technical Indicators |
Question 1
Which of the following would NOT be true in designing a trading system utilizing bands?
A. Sell when price breaks below the lower band
B. Close out longs when prices reverse and go below the center of the band
C. Close out shorts when prices reverse and go below the center of the band
D. Buy when prices penetrate the upper band
Question 2
When using the RSI as an overbought/oversold indicator, a sell signal is generated when:
A. RSI declines below its lower reference line and then rallies above it.
B. RSI crosses above the midpoint (50 level).
C. RSI rises above its upper reference line and then crosses below it.
D. RSI crosses beneath the midpoint (50 level).
Question 3
According to the MTA Code of Ethics, what prohibitions MUST be adhered to after making a buy or sell recommendation?
A. Analysts may effect trades for their own account even if their employer has not had time to act on their recommendation
B. Insider trading activity is the subject of SEC regulations, therefore the MTA Code of Ethics is silent on this issue
C. Allow adequate time for clients to act on recommendations before the analyst acts on the recommendation
D. Analysts must give clients and their employer adequate time to trade, but the analyst's family members are under no such restriction
Question 4
In trend-based trading systems, what is the major determinant of trading activity (i.e., how often buy or sell signals are generated)?
A. Distance between bands
B. Selection of trend speed
C. Use of a scaling factor
D. Smoothing technique used
Question 5
Which of the following is not a disadvantage of the patterns that are formed by Broadening formations?
A. They are relatively common in occurrence
B. The breakout lines are moving permanently away from each other
C. They are often difficult to identify
D. They are hard to make the most of the profit
Solutions:
| Question 1 Answer: C | Question 2 Answer: C | Question 3 Answer: C | Question 4 Answer: B | Question 5 Answer: A |
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