Free CMT Level 1 Questions and Answers

Question 1

Taking trading diamonds into consideration how do we determine the price objective?

Accepted Answer

It is usually the distance that the entry price traveled to reach the diamond

Answer

It is usually the distance that the entry price traveled to reach the maximum price

Answer

It is usually the distance that the exit price traveled to reach the diamond

Answer

It is usually the distance that the exit price traveled to reach the maximum price

Question 2

Which of the following facts is not correct when talking about wedge patterns?

Accepted Answer

Both trend lines are heading in the opposite direction

Answer

A rising wedge has both lines headed upward

Answer

A rising wedge has a lower bound rising more quickly than the upper bound

Answer

It is a triangle pattern

Question 3

Which of the following facts is used to distinguish between a rising and a falling wedge pattern?

Accepted Answer

The upward bound falls more quickly than the lower bound

Answer

The lines cross in the future

Answer

The nomenclature for the crossover

Answer

The height is the same

Question 4

What is the outcome if a later rally within the channel fails to reach the channel line? Select the best possible outcome.

Accepted Answer

The last downward reversal will have a lesser slope than the underlying trend line

Answer

The channel line above the trend line connecting the downward reversal points begins as a line parallel

Answer

The last downward reversal will have a steeper slope than the underlying trend line

Answer

The new channel line through the new upward reversal

Question 5

What is the possible outcome when the downward reversal will have a lesser slope than the underlying trend line?

Accepted Answer

It suggests that the trend line will soon be broken

Answer

It suggests that the trend line will soon be at its maximum level

Answer

It suggests that the risks of the trend line

Answer

It suggests that the profit of the trend line

Question 6

According to Bulkowski what is the percentage of almost all declining and rising wedges to break out?

Accepted Answer

Almost all declining wedges (92%) break out upward, and most rising wedges (69%) break out to the downside

Answer

Almost all rising wedges (92%) break upward, and most declining wedges (69%) break out to the downside

Answer

Almost all rising wedges (92%) break out upward, and most declining wedges (69%) break out to the upward

Answer

Almost all rising wedges (92%) break out upward, and most declining wedges (69%) break out to the downside

Question 7

Which of the following is not a fact regarding the Rising Wedges? Choose the best possible answer.

Accepted Answer

They occur before an upward climax

Answer

The ones that occur during a downtrend appear as very weak rallies against the trend

Answer

They occur after an upward climax

Answer

They occur during a long downward price trend

Question 8

Which of the following statements is not an outcome of a market climax regarding pattern analysis?

Accepted Answer

The underlying trend line is gradually adjusted at a gradual incline slope

Answer

At a steeper slope, the underlying trend line is changed slowly

Answer

A steeper slope is in line with the direction of prices

Answer

It occurs when prices accelerate

Question 9

What is the condition for an upward accelerated trend regarding pattern analysis?

Accepted Answer

The support reversal points occur at levels higher than the projected trend line

Answer

The resistance reversal points occur at levels higher than the projected trend line

Answer

The support reversal points occur at levels lower than the projected trend line

Answer

The resistance reversal points occur at levels lower than the projected trend line

Question 10

When talking about Volume Statistics which of the following is not considered as a fact of Volume Statistics?

Accepted Answer

It is helpful for price analysis

Answer

It is usually different in every security

Answer

It is a measure of liquidity in a security

Answer

All of the above statements