FREE CMT Level 2 Questions and Answers

Question 1

Which of the following is not a disadvantage of the patterns that are formed by Broadening formations?

Accepted Answer

They are relatively common in occurrence

Answer

They are hard to make the most of the profit

Answer

They are often difficult to identify

Answer

The breakout lines are moving permanently away from each other

Question 2

If the upper breakout level is getting higher and higher along the upper trend line which of the following statements is not predicted correctly about this trend?

Accepted Answer

It is using up much of any potential gain just before a breakout

Answer

It is using up much of any potential gain after a breakout

Answer

It is also moving farther from any realistic protective stop level

Answer

It is increasing the risk

Question 3

According to the raw performance statistics which of the following statements predicts the correct when the performance of a broadening pattern at its best and its failure rate?

Accepted Answer

At best, the performance of an expanding pattern is average, and its rate of failure is above average

Answer

At best, the performance of an expanding pattern is average, and its rate of failure is below average

Answer

At best, the performance of an expanding pattern is above average, and its rate of failure is above average

Answer

At best, the performance of an expanding pattern is below average, and its rate of failure is above average

Question 4

Which of the following statements is not true about the Diamond Top with regards to pattern analysis?

Accepted Answer

It is not rare at price bottoms

Answer

It is a profitable pattern

Answer

It consists of a combination of a broadening pattern and a symmetrical triangle

Answer

It occurs at the top of a very sharp upward rise in prices

Question 5

Which of the following perfectly describes the pattern of a standard broadening formation with regard to pattern analysis?

Accepted Answer

The upper trend line goes upwards and must have two peaks, the latter higher than the former

Answer

The upper trend line goes downwards and must have two peaks, the latter higher than the former

Answer

The upper trend line goes upwards and must have a single peak

Answer

The upper trend line goes upwards and must have two peaks, the latter lower than the former

Question 6

Which of the following is the best combination that results with respect to the volume and pullback in the Diamond Top pattern?

Accepted Answer

The best combination is when a downward breakout happens on an under-average amount of breakout with no pullback

Answer

The best combination is when there is an upward breakout on less-than-normal breakout volume with no pullback

Answer

The best mix is when there is a downward breakout on less than a normal breakout rate and with few pullbacks

Answer

The best combination is when there is a downward breakout at an above-average breakout rate with few pullbacks

Question 7

Which of the following methods is not used to portray the volume of trade?

Accepted Answer

Leaf and stem

Answer

Point-and-Figure

Answer

Equivolume

Answer

Bar/candle

Question 8

When using the Bar/Candle method to portray volume what is the relationship defined between price and volume using this method?

Accepted Answer

It has no relationship between price and volume

Answer

It has an indirect relationship between price and volume

Answer

It has a direct relationship between price and volume

Answer

The price is dependent on the volume

Question 9

If 300 shares traded at a certain price which of the following conclusions can be drawn from this given situation?

Accepted Answer

Traders would record four bars at that price

Answer

Traders could determine the price at which supply and demand were equalized

Answer

Traders could determine the support

Answer

Traders could determine the resistance zones

Question 10

Using the Point-and-Figure method what is the standard method used to portray the volume on the chart?

Accepted Answer

This is to sum up the volume occurring when each box was in operation

Answer

This is to multiply the volume occurring when each box was in operation

Answer

This is to divide up the volume occurring by each box was in operation

Answer

It is, to sum up, the volume that occurs when every box is not in use