- Chartered Market Technician
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Chartered Market Technician (CMT) is a professional designation that confirms proficiency in technical analysis of the financial markets. To hold the designation, membership in the Market Technicians Association is required.
The CMT designation requires completion of an education program and examination series in technical analysis. The Market Technicians Association (MTA) oversees the program curriculum and administration of exams. Candidates who pass all three examination levels of the program can earn the Chartered Market Technician designation, which certifies that the individual is competent in technical analysis.[1]
Contents
The CMT Program
The Chartered Market Technician (CMT) Program is a certification process in which candidates are required to demonstrate proficiency in a broad range of technical analysis subjects. Administered by the Accreditation Committee of the Market Technicians Association (MTA), Inc., the Program consists of three levels. CMT Level 1 and CMT Level 2 are multiple choice exams while CMT Level 3 is in essay form.
The MTA began to develop the CMT program in 1985. Just as other professional organizations have standards of competence for members, so the CMT designation provides a recognized standard of proficiency for technical analysts. (The CMT examinations are administered by Thomson Prometric, which administers other professional tests, such as the CPA exam.)
The objectives of the CMT Program are:
- To guide candidates in mastering a professional body of knowledge and in developing analytical skills;
- To promote and encourage the highest standards of education; and
- To grant the right to use the professional designation of Chartered Market Technician (CMT) to those members who successfully complete the Program and agree to abide by the MTA Code of Ethics.
In order to be granted your CMT designation, you must meet the following requirements:
- Successful completion of all three (3) levels of the CMT Exam.
- Have obtained 'Member Status' within the MTA.
- Have been gainfully employed in a professional analytical or investment management capacity for a minimum period of three (3) years and must be regularly engaged in this capacity at the time of successfully passing all three (3) levels of the CMT Exam.
The three-part CMT examination includes:
- Definitions ("terminology, charting methods, and ethics")
- Application ("concepts such as "Dow Theory, Elliott Wave, intermarket, etc.")
- Integration ("competency in ethics and in rendering technical opinions integrating multiple aspects of technical analysis. Essay responses should be of the quality of technical research published by practicing CMT charterholders.")
CMT Material
Material covered by the CMT program spans a wide variety of statistical and technical analysis of price patterns, volume history and measures of trend, momentum and volatility. Trading, automated trading systems, risk management, intermarket analysis, behavioral finance, market history and ethics are also featured in the course of study. The MTA has chosen texts and trading books by various authors as preparation material for each of the three exams and potential candidates can find an updated list of texts through the MTA. Some of the texts currently studied by CMT candidates include:
Edwards, Robert D. and Magee, John, Technical Analysis of Stock Trends, 9th EditionKirkpatrick, Charles D. and Dahlquist, Julie R.: Technical Analysis The Complete Resource for Financial Market Technicians
Pring, Martin J.: Technical Analysis Explained, 4th Edition
Jeremy du Plessis, The Definitive Guide to Point and Figure
Frost, A.J. and Prechter, Robert R., Elliott Wave Principle, Tenth Edition
Kaufman, Perry J., New Trading Systems and Methods, 4th Edition
Nison, Steve, Japanese Candlestick Charting Techniques, 2nd Edition
Pring, Martin J., Investment Psychology Explained
Aronson, David R.: Evidence-Based Technical Analysis
Brown, Constance M., Technical Analysis for the Trading Professional
Murphy, John J., Intermarket Analysis: Profiting From Global Market Relationships
Shiller, Robert J., Irrational Exuberance, 2nd Edition
Value of the CMT Designation
The Chartered Market Technician (CMT) program offers a structured approach to study technical analysis and ensure all key areas are covered. The CMT can help to open doors that may lead to job opportunities. The CMT demonstrates to Wall Street that you are a professional in the field of technical analysis. For those seeking a more traditional Wall Street analyst job, passing the first two CMT exams provides a significant step towards attaining the "Registered Research Analyst" designation from FINRA. Even if you're not looking for a FINRA exemption but rather just to learn technical analysis, the CMT Program offers a structured, organized, and comprehensive way to do so.
Who Seeks the CMT Designation
The Chartered Market Technician designation is sought by individuals with a career in finance, such as securities dealers and brokers, market analysts, portfolio managers, traders, fund managers, financial planners, advisers, and others. Professionals who receive the CMT designation must also become members of the MTA in order to claim the designation. Membership requires sponsorship by three MTA members, a pledge to abide by the MTA's code of ethics, and final approval of the applicant by the MTA board of directors.
Individuals who aspire to greater expertise in the use of technical analysis can go through the CMT examination program. Those who are using technical analysis in a non-career capacity can join the MTA as affiliates.
Series 86 Exemption
In February 2005, the U.S. Securities and Exchange Commission recognized levels 1 and 2 of the CMT exam as an alternative to the Series 86 Examination, as part of the rule changes filed by the North American Securities Dealers Regulation, now known as Financial Industry Regulatory Authority (FINRA) and NYSE. [1] This recognition on the part of securities regulators and the self-governing bodies of the securities industry provided significant new credibility to technical analysis.
See also
- Technical Analysis
- Mathematical Finance
- Algorithmic Trading
- High-frequency trading
- Stock valuation
- Market Technicians Association
- Intermarket analysis
- Point and figure chart
- Candlestick chart
- Dow Theory
- Elliott wave principle
- Relative Strength Index (RSI)
- Resistance
- Support
- Trend line
References
Categories:- Technical analysis
- Professional certification in finance
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