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

Explanation:
For a variety of reasons, expansion shapes are the least useful forms. First, they occur relatively rarely and are often hard to identify. Second, and more importantly, they are hard to make the most of. Because with time the boundary trend lines separate, the breakout Lines pass away from each other all the time.

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

Explanation:
This means the upper breakout level is getting higher and higher along the upper trend line in an upward-breaking broadening pattern. By going higher and higher, it not only uses up much of any possible gain after a breakdown, but it also moves further away from any practical degree of protective stoppage, 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

Explanation:
Raw performance statistics show that the performance of an expanding pattern is at best average and that its failure rate is above average. However, one of the most efficient patterns using an expanding pattern is when it is incorporated into a diamond top with a symmetric triangle.

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

Explanation:
Diamond is one of the less common, but still lucrative patterns. It consists of a mixture of an increasing pattern and a symmetrical triangle, which typically occurs at the top of a very sharp price increase. It’s uncommon at the bottom of the market.

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

Explanation:
The upper trend line slopes upwards in a typical expansion structure and must, therefore, have two peaks the latter higher than the former. Likewise, there must be two troughs in the lower trend line — the latter lower than the former one — and each line must be created at the same time as the other.

CMT - Chartered Market Technician Practice Test

CMT - Chartered Market Technician Practice Test

FREE CMT Level 2 Questions and Answers