Everything you need to pass Level I of the CMT Program
CMT Level I 2020: An Introduction to Technical Analysis fully prepares you to demonstrate the basic competencies of an entry-level analyst, including a working knowledge of terminology and the ability to discuss key concepts and fundamental analytical tools. Covered topics address theory and history, markets, market indicators, construction, confirmation, cycles, selection and decision, system testing, and statistical analysis. The Level I exam emphasizes trend, chart, and pattern analysis.
This cornerstone guidebook of the Chartered Market Technician® Program will provide every advantage to passing the Level I CMT Exam.
Table of Contents
Introduction ix
The CMT Association ix
The CMT Program x
The Level I Textbook xii
Section I Theory and History of Technical Analysis 1
Chapter 1 The Basic Principle of Technical Analysis - The Trend 3
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 2 Dow Theory 15
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 3 History and Construction of Charts 27
Charles D. Kirkpatrick II and Julie R. Dahlquist
Section II Charts, Trends, and Patterns 45
Chapter 4 Trends - The Basics 47
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 5 Breakouts, Stops, and Retracements 75
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 6 Moving Averages 97
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 7 Bar Chart Patterns 125
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 8 Short-Term Patterns 158
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 9 Confirmation 200
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 10 Candlestick Charting Essentials 242
Steve Nison
Chapter 11 Point-and-Figure Charting 252
Perry J. Kaufman
Section III Advanced Concepts in Charting and Trend Analysis 279
Chapter 12 Introduction to the Wave Principle 281
Wayne Gorman, Jeffrey Kennedy, and Robert R. Prechter, Jr.
Chapter 13 The Anatomy of Elliott Wave Trading 299
Wayne Gorman, Jeffrey Kennedy, and Robert R. Prechter, Jr.
Chapter 14 Measuring Market Strength 314
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 15 Foundations of Cycle Theory 347
Kyle Crystal, CMT, CFTe
Chapter 16 Basics of Cycle Analysis 357
Kyle Crystal, CMT, CFTe
Section IV Markets and Volatility 371
Chapter 17 Markets, Instruments, Data, and the Technical Analyst 373
Michael Kahn, CMT
Chapter 18 Equities 376
Michael Kahn, CMT
Chapter 19 Indexes 382
Michael Kahn, CMT
Chapter 20 Fixed Income/Bonds 391
Michael Kahn, CMT
Chapter 21 Futures 400
Michael Kahn, CMT
Chapter 22 Exchange-Traded Products (ETPs) 407
Michael Kahn, CMT
Chapter 23 Foreign Exchange (Currencies) 412
Michael Kahn, CMT
Chapter 24 Options 417
Michael Kahn, CMT
Chapter 25 Understanding Implied Volatility 424
Russell Rhoads
Chapter 26 About the VIX Index 436
Russell Rhoads
Section V Behavioral Finance and Other Theories of Market Dynamics 451
Chapter 27 What is the Efficient Market Hypothesis? 453
Edwin T. Burton and Sunit N. Shah
Chapter 28 The EMH and the “Market Model” 461
Edwin T. Burton and Sunit N. Shah
Chapter 29 The Forerunners to Behavioral Finance 469
Edwin T. Burton and Sunit N. Shah
Chapter 30 Noise Traders and the Law of One Price 474
Edwin T. Burton and Sunit N. Shah
Chapter 31 Noise Traders as Technical Traders 482
Edwin T. Burton and Sunit N. Shah
Chapter 32 Academic Approaches to Technical Analysis 492
Andrew W. Lo and Jasmina Hasanhodzic
Chapter 33 Market Sentiment and Technical Analysis 507
Michael Carr, CMT, CFTe
Chapter 34 Sentiment Measures from Market Data 511
Michael Carr, CMT, CFTe
Chapter 35 Sentiment Measures from External Data 520
Michael Carr, CMT, CFTe
Section VI Basic Statistics for the Technical Analyst 529
Chapter 36 Introduction to Descriptive Statistics 531
Jonas Elmerraji, CMT
Chapter 37 Introduction to Probability 544
Jonas Elmerraji, CMT
Section VII Perspectives on Technical Trading Systems 553
Chapter 38 Objective Rules and Their Evaluation 555
David Aronson
Chapter 39 Being Right or Making Money 570
Ned Davis
Chapter 40 The Model-Building Process 600
Ned Davis
Chapter 41 Relative Strength as a Criterion for Investment Selection 615
Robert A. Levy
Index 631
