Everything you need to pass Level I of the CMT Program
CMT Level I 2021: 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 Introduction to Charts, Part 1 27
Julie Dahlquist, Ph.D., CMT
Chapter 4 Introduction to Charts, Part 2 36
Julie Dahlquist, Ph.D., CMT
Section II Charts, Trends, and Patterns 47
Chapter 5 Trends - The Basics 49
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 6 Breakouts, Stops, and Retracements 77
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 7 Moving Averages 99
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 8 Bar Chart Patterns 127
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 9 Short-Term Patterns 160
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 10 Introduction to Volume Analysis 202
Buff Dormeier, CMT
Chapter 11 Volume: The Technician’s Decryption Device 208
Buff Dormeier, CMT
Chapter 12 An Introduction to Volume Indicators 215
Buff Dormeier, CMT
Chapter 13 Confirmation 219
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 14 Candlestick Charting Essentials 256
Steve Nison
Chapter 15 Point-and-Figure Charting 266
Perry J. Kaufman
Section III Advanced Concepts In Charting and Trend Analysis 293
Chapter 16 Introduction to the Wave Principle 295
Wayne Gorman, Jeffrey Kennedy, and Robert R. Prechter, Jr.
Chapter 17 The Anatomy of Elliott Wave Trading 313
Wayne Gorman, Jeffrey Kennedy, and Robert R. Prechter, Jr.
Chapter 18 Measuring Market Strength 328
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 19 Foundations of Cycle Theory 361
Kyle Crystal, CMT, CFTe
Chapter 20 Basics of Cycle Analysis 371
Kyle Crystal, CMT, CFTe
Section IV Markets and Volatility 385
Chapter 21 Markets, Instruments, Data, and the Technical Analyst 387
Michael Kahn, CMT
Chapter 22 Equities 390
Michael Kahn, CMT
Chapter 23 Indexes 396
Michael Kahn, CMT
Chapter 24 Fixed Income/Bonds 405
Michael Kahn, CMT
Chapter 25 Futures 414
Michael Kahn, CMT
Chapter 26 Exchange-Traded Products (ETPs) 421
Michael Kahn, CMT
Chapter 27 Foreign Exchange (Currencies) 426
Michael Kahn, CMT
Chapter 28 Options 431
Michael Kahn, CMT
Chapter 29 Understanding Implied Volatility 438
Russell Rhoads
Chapter 30 About the VIX Index 450
Russell Rhoads
Section V Behavioral Finance and Other Theories of Market Dynamics 465
Chapter 31 What Is the Efficient Market Hypothesis? 467
Edwin T. Burton and Sunit N. Shah
Chapter 32 The Forerunners to Behavioral Finance 475
Edwin T. Burton and Sunit N. Shah
Chapter 33 Noise Traders and the Law of One Price 480
Edwin T. Burton and Sunit N. Shah
Chapter 34 Noise Traders as Technical Traders 488
Edwin T. Burton and Sunit N. Shah
Chapter 35 Academic Approaches to Technical Analysis 498
Andrew W. Lo and Jasmina Hasanhodzic
Chapter 36 Market Sentiment and Technical Analysis 513
Michael Carr, CMT, CFTe
Chapter 37 Sentiment Measures from Market Data 517
Michael Carr, CMT, CFTe
Chapter 38 Sentiment Measures from External Data 526
Michael Carr, CMT, CFTe
Section VI Basic Statistics For the Technical Analyst 535
Chapter 39 Introduction to Descriptive Statistics 537
Jonas Elmerraji, CMT
Chapter 40 Introduction to Probability 550
Jonas Elmerraji, CMT
Section VII Perspectives On Technical Trading Systems 559
Chapter 41 Objective Rules and Their Evaluation 561
David Aronson
Chapter 42 Being Right or Making Money 576
Ned Davis
Chapter 43 The Model-Building Process 606
Ned Davis
Chapter 44 Relative Strength as a Criterion for Investment Selection 621
Robert A. Levy
Index 637
