The Market Technicians Association (MTA) commissioned a body of knowledge study through Prometric to support the ongoing development of The Chartered Market Technician (CMT) Examination. The CMT Program is a certification process in which candidates are required to demonstrate proficiency in a broad range of technical analysis subjects.
The three-part examination consists of:
Level 1 (132 multiple-choice items with a focus on definition)
Level 2 (170 multiple-choice items with a focus on application)
Level 3 (an essay examination with a focus on integration)
A body of knowledge study is designed to obtain descriptive information about the tasks performed in a job and the knowledge needed to adequately perform those tasks.
Body of Knowledge Executive Summary
* Download a printable PDF of the Body of Knowledge
The Market Technicians Association (MTA) develops and maintains the CMT certification
process. Prometric, a professional testing firm, administers the CMT exams on behalf of the MTA.
The original “Body of Knowledge Study” was conducted in 2004 and was the basis for the technical
analysis material required to successfully pass the CMT examination process. In 2007, a Pulse Survey
was taken to update the CMT test specifications to better reflect changes in the study of technical analysis.
In response to continued changes in the study of technical analysis and membership growth, the MTA,
with the guidance of Prometric, completed the 2010 Job Analysis to ensure that the CMT exams reflect
the knowledge and tasks required to perform technical analysis. This survey was sent to 956 MTA
members and CMT charter holders. Of this number, 337 submitted completed surveys resulting in a
participation rate of 36.4%.
Development of test specifications for the CMT Certification Examinations
The CMT test specifications were revised in January 2010 using the survey results and the input of the
Test Specifications Committee regarding the tasks, knowledge and indicators to be included in the CMT
Level 1 and Level 2 examinations. Level 3 was not included in this survey. All test specification
changes were based on a careful review of the survey results.
As described in MTA’s published information about the CMT examination:
-
CMT Level 1 (Definition). The Level 1 examination measures basic, entry-level competence
and understanding of the candidate. The CMT Level 1 candidate needs to have a working
knowledge of the basic tools of the technical analyst.
-
CMT Level 2 (Definition/Application). The CMT Level 2 examination requires the candidate
to demonstrate a greater depth of analysis and competency. The CMT Level 2 candidate is
expected to demonstrate proficiency in applying more advanced analytical techniques.
Overall, the candidate is responsible for the theory and application of concepts and
techniques.
-
CMT Level 3 (Integration). The CMT Level 3 examination tests the candidate on the
development of logical and consistent research opinions, portfolio strategies and trading
decisions based on a wide range of charts and technical data. The CMT 3 candidate must
pass the ethics portion of this exam or risk failure.
The CMT examinations test the critical knowledge and tasks needed to perform the duties as a technical
analyst. The tasks provide context for designing robust examination items that reflect work activities
validated through the “Jobs Survey” in addition to the recommendations made by the Test Specifications
Committee. . All material assigned for CMT 1 and CMT 2 candidates will be cumulative. CMT 3
candidates are responsible for the readings assigned to all levels of the CMT program curriculum.
Task Domains
- Data Collection
- Data Analysis
- Decision Making
- Implementation
- Ethics
Knowledge Domains
- Theory and History
- Markets and Market Indicators
- Construction
- Trend Analysis
- Chart and Pattern Analysis
- Confirmation
- Cycles
- Selection
- System Testing and Money Management
- Ethics
Development of Test Content Weights for the CMT Level 1 and Level 2 Certification Examinations.
The Test Specifications Committee and the MTA membership population including all CMT’s
participated in a survey that required each member to individually assign a percentage weight to the
each of the six knowledge domains: General Principles; Trend and Momentum; Sentiment (Behavioral
Finance); Flow of Funds; Intermarket Analysis; and Trading Investment Strategies.
Weights were then entered into the Excel® spreadsheet and results shared with all committee members.
This resulted in a productive discussion among the committee members regarding the optimal
percentages for CMT Level 1 and Level 2 examinations. The following show the recommended weights
by domain for the CMT 1 and CMT 2 examinations.
Test Content Weights Recommended by the Test Specifications Committee for the CMT Level 1 Certification Examination:
CONTENT AREAS |
PERCENTAGE |
QUESTIONS (+/- 2) |
Theory and History |
10% |
12 |
Markets |
3% |
3 |
Market Indicators |
13% |
16 |
Construction |
15% |
18 |
Trend Analysis |
15% |
18 |
Chart and Pattern Analysis |
18% |
22 |
Confirmation |
10% |
12 |
Cycles |
4% |
5 |
Selection and Decision |
5% |
6 |
System Testing Money Management |
4% |
4 |
Ethics |
3% |
4 |
TOTAL |
100% |
120 |
120 Operational Items (12 Pretest Items): Total Items: 132 per exam form
Test Content Weights Recommended by the Test Specifications Committee for the CMT Level 2 Certification Examination:
CONTENT AREAS |
PERCENTAGE |
QUESTIONS (+/- 2) |
Theory and History |
3% |
4 |
Market Indicators |
5% |
7 |
Construction |
1% |
1 |
Trend Analysis |
20% |
30 |
Chart and Pattern Analysis |
23% |
35 |
Confirmation |
15% |
23 |
Cycles |
3% |
4 |
Selection and Decision |
17% |
26 |
System Testing Money Management |
10% |
15 |
Ethics |
3% |
5 |
TOTAL |
100% |
150 |
150 Operational Items (20 Pretest Items): Total Items: 170 per exam form
CMT Level 3 examination:
The CMT Level 3 Examination is a four-hour essay examination that consists of independent questions
worth a total of 240 points. These questions have sub-questions within them. Therefore one question
may have several parts which call for independent analysis linking that analysis to well supported
conclusions. The primary focus of the Level 3 exam is the practical and ethical application and
integration of technical analysis. In other words, all past requirements and background knowledge will
be tested in an application format. All candidates must pass and achieve at least a 70% score on ethics.
A candidate will not achieve a pass for the CMT 3 exam unless or until the ethics portion of the exam is
passed. Based on information provided by MTA, the point system is predicated on the curriculum and
objectives of the Level 3 exam. The focus of the Level 3 exam is the integration and application of
technical analysis. The candidate will analyze different types of charts with the specific objective of
developing and substantiating their analysis and investment recommendations. The candidates are
required to fully substantiate their analysis in a manner that is supportive and consistent with their
recommendations. The examination also tests the candidates on reading assignments.
The Test Specifications Committee did not assign specific percentages to the knowledge domains;
however, the Committee members did discuss the potential test focus in terms of a loose ranking of the
knowledge domains from “major focus” to “minor focus”. At the present time, Prometric is involved
with the administration, but is not involved with scoring of the CMT Level 3 Examination.
* Download a printable PDF of the Body of Knowledge |