CMT CMT Candlestick Analysis 2

Question 1

A 'Harami' candlestick pattern occurs when:

Accepted Answer

The second candle's body is contained within the first candle's body

Answer

A Harami consists of a large candle followed by a smaller candle whose body fits entirely within the larger candle's body, suggesting a potential trend slowdown.

Question 2

Which candlestick pattern is identified by a long lower shadow at least twice the length of the real body, appearing in a downtrend and signaling a potential reversal?

Accepted Answer

Hammer

Answer

The Hammer forms in a downtrend with a small real body and a long lower shadow, showing that buyers overcame selling pressure during the session.

Question 3

A 'Dark Cloud Cover' pattern is most reliably used as:

Accepted Answer

A bearish reversal signal in an uptrend

Answer

Dark Cloud Cover forms when a bearish candle opens above the prior bullish candle's close and closes below its midpoint, suggesting a bearish reversal.

Question 4

A 'Piercing Line' pattern in candlestick analysis signals:

Accepted Answer

Bullish reversal in a downtrend

Answer

The Piercing Line forms in a downtrend when a bullish candle opens below the prior bearish candle's low and closes above its midpoint, indicating buying pressure.

Question 5

A 'Spinning Top' candlestick is characterized by:

Accepted Answer

A small body with upper and lower shadows of similar length

Answer

A Spinning Top has a small real body with roughly equal upper and lower shadows, reflecting market indecision as neither bulls nor bears dominated.

CMT - Chartered Market Technician Practice Test

CMT - Chartered Market Technician Practice Test

CMT CMT Candlestick Analysis 2