CMT Level I Exam Study Guide (2026)
Everything the CMT Level I Exam (Chartered Market Technician) tests, topic by topic: what each section covers, the facts that come up most, and how to study it. Pair it with the free 15-question practice test.
The exam at a glance
| Questions | 132 multiple-choice questions (120 scored, 12 unscored trial items) |
|---|---|
| Time | 2 hours |
| Passing score | Not published. The CMT Association sets a scaled passing standard; practise to 70% or higher |
| Format | Closed book, computer-based |
| Certifying body | CMT Association |
| Test provider | Prometric (test center or ProProctor remote proctoring) |
Mind map: the whole exam on one screen
Read the complete CMT Level I study notes for “Theory and History of Technical Analysis”
Our first full set of comprehensive notes, about 15 minutes of reading: Why technical analysis works at all · Dow Theory in six principles · Market efficiency and its critics · The biases that make trends · A short history worth knowing, a worked exam example, the traps examiners use and a one-minute recap. Create a free account to read it and see how premium notes work before you decide.
1. Theory and History of Technical Analysis
The biggest Level I domain (38%): Dow Theory, the assumptions behind technical analysis, market efficiency and behavioral finance. Mostly definition and 'which statement is true' questions.
Key facts
- Technical analysis rests on three premises: price discounts everything, prices move in trends, and history tends to repeat because human behavior does.
- Dow Theory: the averages discount everything; three trends (primary, secondary, minor); primary trends have three phases (accumulation, public participation, distribution).
- In Dow Theory the Industrials and the Transportation (Rail) averages must confirm each other, and volume should expand in the direction of the primary trend.
- A trend is assumed to stay in effect until it gives a definite reversal signal.
- The efficient market hypothesis has weak, semi-strong and strong forms; the weak form says past prices can't predict future prices, which technicians dispute.
- Behavioral finance explains why trends and extremes happen: loss aversion, the disposition effect, herding, anchoring, overconfidence and confirmation bias.
- Prospect theory (Kahneman and Tversky): losses hurt about twice as much as equal gains feel good, and people judge outcomes against a reference point.
Flashcards
Exam tip: Dow Theory questions are pure definitions. Learn the exact words: 'confirm', 'three phases', 'until a definite reversal'.
2. Charts, Trends and Patterns
Chart types, trendlines, support and resistance, gaps, classic reversal and continuation patterns, and candlesticks. Expect pattern identification and measured-move targets.
Key facts
- Support is where buying has stopped declines; resistance is where selling has stopped advances. Once broken, support often becomes resistance and vice versa.
- Up trendlines connect rising lows; down trendlines connect falling highs. The more touches and the longer the line, the more significant it is.
- Reversal patterns: head and shoulders, double and triple tops and bottoms, rounding tops and bottoms. Continuation patterns: flags, pennants, triangles, rectangles.
- Measured moves: pattern height projected from the breakout; flags and pennants use the length of the flagpole.
- Gaps: common (filled), breakaway (starts a trend, high volume), runaway or measuring (mid-trend), exhaustion (late, soon filled).
- Candlesticks: doji (indecision), hammer and hanging man (same shape, different context), engulfing, morning and evening stars.
- Logarithmic (semi-log) scales show equal percentage moves as equal distances, which matters for long-term charts.
Flashcards
Exam tip: When a question gives you a pattern and prices, it almost always wants the measured target. Do the subtraction first.
3. Moving Averages and Indicators
Simple and exponential moving averages, crossovers, envelopes and bands, and momentum oscillators (RSI, stochastics, MACD, ROC). Formulas and default settings are heavily tested.
Key facts
- SMA = sum of the last n closes ÷ n. EMA weights recent prices more: k = 2 ÷ (n + 1).
- A shorter moving average is more sensitive (more signals, more whipsaws); a longer one lags more but gives fewer false signals.
- A golden cross is the 50-day crossing above the 200-day; a death cross is the opposite.
- RSI = 100 − 100 ÷ (1 + RS), RS = average gain ÷ average loss; default 14 periods, 70/30 levels.
- Stochastic %K = (close − lowest low) ÷ (highest high − lowest low) × 100; %D is a 3-period average of %K.
- MACD = 12-period EMA − 26-period EMA; signal line = 9-period EMA of MACD; histogram = MACD − signal.
- Bollinger Bands = 20-period SMA ± 2 standard deviations; bands widen with volatility.
Flashcards
Exam tip: Overbought isn't a sell signal on its own. Questions often reward the answer that waits for confirmation, such as a divergence or a cross back below 70.
Test yourself on these topics
Take the free 15-question CMT Level I test, then save your results to unlock your Readiness Score and the mistakes bank.
4. Volume, Breadth and Sentiment
Volume indicators (OBV, accumulation/distribution), market breadth (advance-decline line, new highs/lows) and sentiment measures (put/call ratio, surveys, VIX). Know what each confirms or contradicts.
Key facts
- Volume should expand in the direction of the trend. Rising prices on falling volume suggest a weakening advance.
- OBV adds volume on up closes and subtracts it on down closes; its trend and divergences matter, not its absolute level.
Flashcards
Exam tip: Sentiment questions are about extremes. A normal reading means nothing; only stretched readings are contrarian signals.
5. Cycles, Elliott Wave and Fibonacci
Cycle principles, Elliott Wave rules and guidelines, Fibonacci ratios and point-and-figure basics.
Key facts
- Cycle principles include summation, harmonicity, synchronicity, proportionality, nominality and variation.
- Elliott impulse waves move in five (1-2-3-4-5), corrections in three (A-B-C); a full cycle has eight waves.
Flashcards
Exam tip: Separate Elliott rules (never broken) from guidelines (usually true). Questions love to swap one for the other.
6. Statistics, Risk and Ethics
Descriptive statistics, correlation, the normal distribution, basic system and risk measures, and the CMT Code of Ethics (3% of Level I).
Key facts
- Mean, median and mode measure the center; standard deviation and variance measure dispersion.
- Normal distribution: about 68% within 1 standard deviation, 95% within 2, 99.7% within 3.
Flashcards
Exam tip: Ethics is only 3% of Level I, but those questions are quick points: the answer is almost always the one that protects the client and tells the truth.
How to pass
- 132 questions in 2 hours is about 55 seconds each. Formula and definition questions should take you 20 seconds so you bank time for the chart scenarios.
- Theory and History is the biggest domain at 38%. Dow Theory, market efficiency and behavioral finance are easy points if you know the exact definitions.
- Learn the classic indicator settings (RSI 14, MACD 12-26-9, Bollinger 20 and 2) and what each indicator measures, not just how it looks.
- 12 questions are unscored trial items and you can't tell which. Treat every question as if it counts.
Frequently asked questions
How long should I study for the CMT Level I exam?
Most working candidates need 4 to 8 weeks at 45 to 60 minutes a day. Book your exam once your Readiness Score has stayed at 80 or higher for about a week.
Can I take the CMT Level I exam online?
Yes. CMT exams are delivered at Prometric test centers or online through Prometric's ProProctor remote proctoring. Format: closed book, computer-based. Check the current CMT Program Guide for the rules.
What score do I need to pass the CMT Level I exam?
Not published. The CMT Association sets a scaled passing standard; practise to 70% or higher. The exam has 132 multiple-choice questions (120 scored, 12 unscored trial items) and a time limit of 2 hours.
What are the most tested topics?
The outline covers theory and history of technical analysis, charts, trends and patterns, moving averages and indicators, volume, breadth and sentiment, cycles, elliott wave and fibonacci, statistics, risk and ethics. Use the free practice test to see which ones you need most.
The premium CMT Level I study path
Premium CMT Level I prep is studied one topic at a time. Each step starts with that topic's key notes and flashcard deck, then its own question sets of 25, so you master one topic before you move to the next. When every topic is strong, the 6 full mock exams show you're ready.
Your step-by-step study path
- 1Theory and History of Technical Analysis10 key notes, 135 flashcards, then 500 practice questions in 20 sets of 25Notes free with an account
- 2Charts, Trends and Patterns10 key notes, 135 flashcards, then 500 practice questions in 20 sets of 25Premium
- 3Moving Averages and Indicators10 key notes, 135 flashcards, then 500 practice questions in 20 sets of 25Premium
- 4Volume, Breadth and Sentiment10 key notes, 135 flashcards, then 500 practice questions in 20 sets of 25Premium
- 5Cycles, Elliott Wave and Fibonacci10 key notes, 130 flashcards, then 500 practice questions in 20 sets of 25Premium
- 6Statistics, Risk and Ethics10 key notes, 130 flashcards, then 500 practice questions in 20 sets of 25Premium
- Final step: 6 full mock exams132 questions each, timed like test day. Pass them, then book your exam.Premium
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- 3,000 practice questions + 6 full mock exams per exam
- 800 flashcards + 60 key notes per exam, by topic, plus mind maps
- Spaced repetition + mistakes bank
- Readiness Score & detailed reports
- Video lessons as they release
- Content updates during your access
- 5 bonuses: indicator formula sheet, chart pattern atlas, study planner and more
- Pass Guarantee: complete the prep, pass or 100% back
Renews once a year until you cancel. We email you before each renewal. Cancel any time from your account; you keep access until the end of the year you've paid for.
Summarized from the CMT Association's official candidate information and the rules cited, checked October 2026. Confirm current requirements with CMT Association.