Chartered Market Technician (CMT) Program Level I

April/May 2015 Reading Assignments

The CMT I candidate is responsible for the material on a definition level. The candidate must understand the
terminology used in these readings, be able to describe the concepts discussed in these readings, and be able to
examine trends.

The CMT Level I Exam measures basic, entry-level competence. The CMT I candidate should have a
working knowledge of the basic tools of the technician.

Exam time length: 2 hours, 15 minutes
Exam format: Multiple Choice

Immediate scoring will be available this exams.

CMT Level I Exam tests the candidate's knowledge of six basic areas of technical analysis:
1) Terminology of technical analysis
2) Methods of charting
3) Determination of price trends/basics of pattern recognition
4) Establishing price targets
5) Equity market analysis
6) Applying technical analysis to bonds, currencies, futures and options
Listed below and on the following page are the reading assignments for the Level I Exam. The CMT candidate
is responsible for knowing and understanding the entire list of reading assignments.


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CMT Level I Exam Reading Assignments

1) MTA Code of Ethics (attached at the end of this document)
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2) Edwards, Robert D., Magee, John, and Bassetti, W.H.C. Technical Analysis of Stock Trends, 10 Edition, CRC Press, Taylor
& Francis Group, Boca Raton, Florida, c2013, ISBN 978-1-4398-9818-5

Chapters:
1. The technical approach to trading and investing
2. Charts
3. The Dow Theory
4. The Dow Theorys defects
6. Important Reversal Patterns
7. Important Reversal Patterns: continued
8. Important Reversal Patterns: the Triangles
9. Important Reversal Patterns: continued
10. Other Reversal phenomena
11. Consolidation Formations
12. Gaps
13. Support and Resistance
14. Trendlines and Channels
15. Major Trendlines
24. The probable moves of your stocks
28. What is a bottom, what is a top?
29. Trendlines in action
30. Use of Support and Resistance
31. Not all in one basket
32. Measuring implications in technical chart patterns
38. Balanced and diversified
40. How much capital to use in trading
41. Application of capital in practice
42. Portfolio risk management

3) Kirkpatrick, Charles D. and Dahlquist, Julie R.: Technical Analysis The Complete Resource for Financial Market
nd
Technicians 2 Edition, Pearson Education, Inc., c. 2011, ISBN-10: 0-13-705944-2; ISBN-13: 978-0-13-705944-7

Chapters:
1. Introduction to Technical Analysis
2. The Basic Principle of Technical Analysis The Trend
3. History of Technical Analysis
4. The Technical Analysis Controversy
5. An Overview of Markets
6. Dow Theory
8. Measuring Market Strength
9. Temporal Patterns and Cycles
10. Flow of Funds
11. History and Construction of Charts
12. Trends The Basics
14. Moving Averages
15. Bar Chart Patterns

17. Short-Term Patterns

18. Confirmation
19. Cycles
20. Elliott, Fibonacci, and Gann
21. Selection of Markets and Issues: Trading and Investing
22. System Design and Testing
23. Money and Risk Management
Appendix A Basic Statistics
Appendix B Types of Orders and Other Trader Terminology

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4) Pring, Martin J.: Technical Analysis Explained, 5 Edition, McGraw Hill Book Company, New York, NY, c.2014, ISBN 978-
0-07-182517-7


Chapters:

2. Financial Markets and the Business Cycle

3. Dow Theory

4. Typical Parameters for Intermediate Trends

6. Trendlines

7. Basic Characteristics of Volume

8. Classic Price Patterns

9. Smaller Price Patterns and Gaps

10. One- and Two-Bar Price Patterns

11. Moving Averages

13. Momentum I: Basic Principles

14. Momentum II: Individual Indicators

15. Momentum III: Individual Indicators

16. Candlestick Charting

18. Miscellaneous Techniques for Determining Trends

19. The Concept of Relative Strength

21. Price: The Major Averages

22. Price: Sector Rotation

24. Time: Cycles and Seasonal Patterns

25. Practical Identification of Cycles

26. Volume II: Volume Indicators

27. Market Breadth

28. Indicators and Relationships That Measure Confidence

29. The Importance of Sentiment

30. Integrating Contrary Opinion and Technical Analysis

31. Why Interest Rates Affect the Stock Market

32. Using Technical Analysis to Select Individual Stocks

33. Technical Analysis of International Stock Markets

34. Automated Trading Systems

35. Checkpoints for Identifying Primary Stock Market Peaks and Troughs


nd
5) du Plessis, Jeremy, The Definitive Guide to Point and Figure 2 Edition, Harriman House LTD, 2012, ISBN: 978-0857192-
45-5. Click on the following link to buy it at an MTA members special discount: www.updata.co.uk/shop/mtabookoffer.asp

Chapters:
1. Introduction to Point and Figure Charts
2. Characteristics and Construction
3. Understanding Point and Figure Charts

4. Projecting Price Targets

For those using the second edition of the du Plessis book

Chapters:
1. Introduction of Point and Figure Charts
2. Characteristics and Construction
3. Understanding Patterns and Signals
4. Understanding and using Trend lines
5. Projecting Price Targets

Revised November 2014

Chartered Market Technician (CMT) Program Level II
April/May 2015 Reading Assignments


CMT Level II candidates are responsible for the theory and application of concepts and techniques covered by the
assigned readings. CMT Level II candidates must expand his/her understanding of technical analysis to apply various
technical indicators and techniques in the analysis of the overall market or an individual security.

The CMT Level II Exam requires the candidate to demonstrate a greater depth of competency and proficiency by
applying more advanced analytical techniques.

Exam time length: 4 hours, 15 minutes
Exam format: Multiple Choice

Immediate scoring will be available on this exam.
Listed below and on the following page are the reading assignments for the Level II Exam. The CMT candidate is
responsible for knowing and understanding the entire list of reading assignments. All candidates are encouraged to also
review the reading materials for the Level I Exam.

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CMT Level II Exam Reading Assignments

1) MTA Code of Ethics (attached at the end of this document)

th
2) Edwards, Robert D., Magee, John, and Bassetti, W.H.C., Technical Analysis of Stock Trends, 10 Edition, CRC Press, Taylor &
Francis Group, Boca Raton, Florida, c2013, ISBN 978-1-4398-9818-5


Chapters:

17. A summary and concluding comments

23. Choosing and managing high-risk stocks: tulip stocks, Internet sector, and speculative frenzies

24. The probable moves of your stocks

27. Stop orders

28. What is a bottom, what is a top?

41. Application of capital in practice

42. Portfolio risk management

th

3) Frost, A.J. and Prechter, Robert R., Elliott Wave Principle, 10 Edition, New Classics Library, Gainesville, GA c. 1978-2005, ISBN 0-
932750-75-3

Chapters:
1. The Broad Concept
2. Guidelines of Wave Formation
3. Historical and Mathematical Background
4. Ratio Analysis and Fibonacci Time Sequences

th
4) Kaufman, Perry J., New Trading Systems and Methods, 5 Edition, John Wiley & Sons, Inc., c.2005,2013, ISBN 978-1-118-04356-1

Chapters:
1. Introduction
2. Basic Concepts and Calculations
3. Charting
4. Charting Systems and Techniques
6. Regression Analysis
7. Time-Based Trend Calculations
8. Trend Systems
9. Momentum and Oscillators
10. Seasonality and Calendar Patterns
11. Cycle Analysis
12. Volume, Open Interest and Breadth
13. Spreads and Arbitrage
14. Behavioral Techniques
20. Advanced Techniques
21. System Testing
23. Risk Control
24. Diversification and Portfolio Allocation

nd
5) Kirkpatrick, Charles D. and Dahlquist, Julie R.: Technical Analysis The Complete Resource for Financial Market Technicians 2
Edition, Pearson Education, Inc., c. 2011, ISBN-10: 0-13-705944-2; ISBN-13: 978-0-13-705944-7

Chapters:
7. Sentiment
10. Flow of Funds
13. Breakouts, Stops, and Retracements
14. Moving Averages
15. Bar Chart Patterns
17. Short-Term Patterns
18. Confirmation
19. Cycles
20. Elliott, Fibonacci, and Gann
21. Selection of Market and Issues: Trading and Investing
22. System Design and Testing
23. Money and Risk Management
Appendix A Basic Statistics

nd
6) Nison, Steve, Japanese Candlestick Charting Techniques, 2 Edition, New York Institute of Finance, c.2001, ISBN 0-7352-0181-1

Chapters:
1. Introduction
2. A Historical Background
3. Constructing the Candlestick
4. Reversal Patterns
5. Stars
6. More Reversal Patterns

7. Continuation Patterns
9. Putting It All Together

7) Pring, Martin J., Investment Psychology Explained, John Wiley & Sons, Inc., c.1993, ISBN 0-471-13300-0

Chapters:
All Chapters

th
8) Pring, Martin J.: Technical Analysis Explained, 5 Edition, McGraw Hill Book Company, New York, NY, c.2001, ISBN 0-07-1825177

Chapters:
19. The Concept of Relative Strength
22. Price: Sector Rotation
25. Practical Identification of Cycles
31. Why Interest Rates Affect the Stock Market
34. Automated Trading Systems
35. Checkpoints for Identifying Primary Stock Market Peaks and Troughs

9) Excerpt from: Wilkinson, Chris: Technically Speaking, Courtesy of Traders Press Inc.

The required reading excerpt from this book can be found here: http://tinyurl.com/cmtlevel2

10) Aronson, David R.: Evidence-Based Technical Analysis, John Wiley & Sons, Inc., Hoboken, New Jersey, c. 2007 by David R.
Aronson. ISBN-13: 978-0-470-00874-4 (cloth), ISBN-10: 0-470-00874-1 (cloth)

Chapters:
4. Statistical Analysis
5. Hypothesis Tests and Confidence Intervals
6. Data-Mining Bias: the Fools Gold and Objective TA
7. Theories of Nonrandom Price Motion

nd
11) du Plessis, Jeremy, The Definitive Guide to Point and Figure 2 Edition, Harriman House LTD, 2012, ISBN: 978-0857192-45-5.
Click on the following link to buy it at an MTA members special discount: www.updata.co.uk/shop/mtabookoffer.asp

Chapters:
5. Analyzing Point and Figure Charts
6. Point and Figure Charts of Indicators
7. Optimization of Point and Figure Charts
8. Point and Figures Contribution to Market Breadth
9. Advanced Point and Figure Techniques

For those using the second edition of the du Plessis book:

Chapters:
6. Analyzing Point and Figure Charts
7. Point and Figure charts of Indicators
8. Optimization of Point and Figure Charts
9. Point and Figures Contribution to Market Breadth
10. Advanced Point and Figure Techniques

Revised November 2014

Chartered Market Technician (CMT) Program Level III

April/May 2015 Reading Assignments

CMT Level III candidates are expected to demonstrate his/her proficiency in the integration of the various indicators
and concepts associated with technical analysis. The CMT Level III Exam is in essay format and is computerized. Level III
Exam information follows.

The CMT Level III Exam will test the CMT candidate on the development of logical, thorough research opinions, portfolio
strategies or trading decisions predicated on the integration of a wide range of charts, indicators and other technical
concepts and data.

Exam time length: 4 hours
Exam format: Essay
Points: 240

Charts will be on screen and chart books will be provided. Ethics will be tested and must be passed by all candidates.

Listed below and on the following page are the reading assignments for the CMT Level III Exam. The CMT candidate is
responsible for knowing and understanding the entire list of reading assignments, in addition to the CMT Level I and
Level II reading assignments.


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CMT Level III Exam Reading Assignments

1) MTA Code of Ethics (attached at the end of this document)

nd
2) Brown, Constance M., Technical Analysis for the Trading Professional 2 Edition, McGraw-Hill, c.2012 ISBN-10: 007175914X;
ISBN-13: 978-0071759144

Chapters:
1. Oscillators Do Not Travel Between 1 and 100
2. Dominant Trading Cycles Are Not Time Symmetrical
3. Choosing and Adjusting Period Setup for Oscillators
4. Dominant Trend Lines Are Not Always From Extreme Price High or Lows
5. Signals From Moving Averages Are Frequently Absent in Real-Time Charts
6. Adjusting Traditional Fibonacci Projections for Higher-Probability Targets
7. Price Projections by Reverse Engineering Indicators
8. Price Objectives Derived From Positive and Negative Reversals in RSI
9. Calculating Price and Time Objectives from a Gann Wheel
10. Using Oscillators with the Elliott Wave Principle
11. Volatility Bands on Oscillators

nd

3) du Plessis, Jeremy: The Definitive Guide to Point and Figure, 2 Edition, Harriman House Ltd., c.2005, ISBN 1-897-59763-0. Click
on the following link to buy it at an MTA members special discount: www.updata.co.uk/shop/mtabookoffer.asp

Chapters:
All Chapters

th
4) Frost, A.J. and Prechter, Robert R., Elliott Wave Principle, 10 Edition, New Classics Library, Gainesville, GA c. 1978-2005, ISBN 0-
932750-75-3

Chapters:
All chapters

5) Montier, James, Behavioural Investing: A Practitioners Guide to Applying Behavioural Finance, John Wiley & Sons Inc., ISBN-10:
0470516704, ISBN-13: 978-0470516706

Chapters
1. Emotion, Neuroscience and Investing: Investors as Dopamine Addicts
2. Part Man, Part Monkey
3. Take a Walk on the Wild Side
4. Brain Damage, Addicts and Pigeons
5. What Do Secretaries Dustbins and the Da Vinci Code have in Common
6. The Limits to Learning
7. Behaving Badly
8. A Behavioural Critique
9. The Folly of Forecasting: Ignore all Economists, Strategists, & Analysts
10. What value Analysts?
11. The Illusion of Knowledge or Is More Information Better Information?
12. Why Waste Your Time Listening to Company Management?
13. Whos a Pretty Boy then? Or Beauty Contests, Rationality and Greater Fools
14. ADHD, Time Horizons and Underperformance
15. The Story is The Thing (or The Allure of Growth)
16. Scepticism is Rare or (Descartes vs Spinoza)
17. Are Two Heads Better Than One?
29. Improving Returns Using Inside Information
30. Just a Little Patience: Part I
31. Just a Little Patience: Part II
32. Sectors, Value and Momentum
33. Sector-Relative Factors Works Best
34. Cheap Countries Outperform
38. The Anatomy of a Bubble
39. De-bubbling: Alpha Generation
40. Running with the Devil: A Cynical Bubble
41. Bubble Echoes: The Empirical Evidence

6) Murphy, John J., Trading with Intermarket Analysis: A Visual Approach to Beating the Financial Markets Using Exchange-
Traded Funds, John Wiley & Sons Inc., c.2012, ISBN: 978-1-118-31437

Chapters:
All Chapters

nd
7) Nison, Steve, Japanese Candlestick Charting Techniques, 2 Edition, New York Institute of Finance, c.2001, ISBN 0-7352-0181-1

Chapters:
10. A Cluster of Candles

11. Candles With Trend Lines

12. Candles With Retracement Levels
13. Candles With Moving Averages
14. Candles With Oscillators
15. Candles With Volume
16. Measure Moves
17. The Best of the East and West: The Power of Convergence


Revised May 2014

Market Technicians Association
CODE OF ETHICS
Amended December 2004
The Market Technicians Association has established ethical standards of professional conduct which every Member and Affiliate shall maintain. The
Ethical Standards set forth in 1 through 9 serve as a guide of professional responsibility and as a benchmark for ethical judgment.
1. Members and Affiliates shall maintain at all times the highest standards of professional competence, integrity and judgment. Said standards
should be maintained, and members and affiliates should act with dignity and in an ethical manner when dealing with the public, clients, prospects,
employees, fellow Members and Affiliates and business associates.
This ethical standard requires strict compliance with the applicable laws and regulations of any government, governmental agency and regulatory
organization which has jurisdiction over the professional activities of Members and Affiliates.
This same ethical standard requires that Members and Affiliates abide by the Constitution and By-Laws of the Association, and all rules
promulgated by its Board of Directors. Members and Affiliates shall not unduly exploit their relationship with the Association for commercial
purposes, nor use, or permit others to use, Association mailing lists for other than Association purposes.
2. Members and Affiliates shall not publish or make statements which they know or have reason to believe are inaccurate or misleading. Members
and Affiliates shall avoid leading others to believe that their technically-derived views of future security price behavior reflect foreknowledge rather
than estimates and projections subject to reexamination and, as events may dictate, to change.
3. Members and Affiliates shall not publish or make statements concerning the technical position of a security, a market or any of its components
or aspects unless such statements are reasonable and consistent in light of the available evidence and of the accumulated knowledge in the field of
financial technical analysis. New methods of technical analysis and modifications of existing concepts and techniques shall be fully documented as
to procedure and rationale. Proprietary methods shall not be infringed, but this standard shall be a guide in the creation of proprietary products.
4. Members and Affiliates shall not publish or make statements which indefensibly disparage and discredit the analytical work of others.
5. Members and Affiliates shall not seek, disseminate or act on the basis of material, non-public (inside) information, if to do so would violate the
laws and regulations of any government, governmental agency or regulatory organization relating to the use of inside information.
6. Members and Affiliates shall keep in confidence knowledge concerning the lawful private affairs of both past and present clients, employers, and
employers clients.
7. When a Member or Affiliate recommends that a security ought to be bought, sold or held, adequate opportunity to act on such a
recommendation shall be given to the Members or Affiliates clients, employer, and the employers clients before acting on behalf of either the
Members or Affiliates own account or the accounts of immediate family members.
8. Members and Affiliates shall not copy or deliberately use substantially the same language or analysis contained in reports, studies or writings
prepared by any author unless permission to do so is received, in advance, from the author. In the event the original author is deceased, or is
otherwise unavailable to grant such permission, Members and Affiliates must ensure that the original author receives prominent and adequate
credit for the original work.
9. Members who have earned the CMT designation shall use CMT after their name whenever and wherever appropriate.