Chartered Market Technician (CMT) is a professional designation that confirms proficiency in technical analysis

Technical analysis

In finance, technical analysis is security analysis discipline for forecasting the direction of prices through the study of past market data, primarily price and volume. Behavioral economics and quantitative analysis incorporate technical analysis, which being an aspect of active management stands...

 of the financial markets. To hold the designation, membership in the Market Technicians Association

Market Technicians Association

The Market Technicians Association is a non-profit, global, professional organization of Technical Analysts based out of New York City. The MTA seeks to educate the financial community and public, increase the use of Technical Analysis, and maintain standards of expertise and ethics among...

 is required.

The CMT designation requires completion of an education program and examination series in technical analysis. The Market Technicians Association

Market Technicians Association

The Market Technicians Association is a non-profit, global, professional organization of Technical Analysts based out of New York City. The MTA seeks to educate the financial community and public, increase the use of Technical Analysis, and maintain standards of expertise and ethics among...

 (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.

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:

1. Definitions ("terminology, charting methods, and ethics")
2. Application ("concepts such as "Dow Theory, Elliott Wave, intermarket, etc.")
3. 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

Risk management

Risk management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities...

, intermarket analysis

Intermarket analysis

Intermarket Analysis is considered as a relationship, or a measurable correlation between certain markets. Intermarket analysis can be though of as a form of fundamental analysis, without the lag....

, behavioral finance

Behavioral finance

Behavioral economics and its related area of study, behavioral finance, use social, cognitive and emotional factors in understanding the economic decisions of individuals and institutions performing economic functions, including consumers, borrowers and investors, and their effects on market...

, 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 Edition

Kirkpatrick, 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

Financial Industry Regulatory Authority

In the United States, the Financial Industry Regulatory Authority, Inc., or FINRA, is a private corporation that acts as a self-regulatory organization . FINRA is the successor to the National Association of Securities Dealers, Inc. ...

 (FINRA) and NYSE. http://www.sec.gov/rules/sro/nasd/34-51240.pdf 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
  Technical analysis
  In finance, technical analysis is security analysis discipline for forecasting the direction of prices through the study of past market data, primarily price and volume. Behavioral economics and quantitative analysis incorporate technical analysis, which being an aspect of active management stands...
  
  
• Mathematical Finance
  Mathematical finance
  Mathematical finance is a field of applied mathematics, concerned with financial markets. The subject has a close relationship with the discipline of financial economics, which is concerned with much of the underlying theory. Generally, mathematical finance will derive and extend the mathematical...
  
  
• Algorithmic Trading
  Algorithmic trading
  In electronic financial markets, algorithmic trading or automated trading, also known as algo trading, black-box trading or robo trading, is the use of electronic platforms for entering trading orders with an algorithm deciding on aspects of the order such as the timing, price, or quantity of the...
  
  
• High-frequency trading
  High-frequency trading
  High-frequency trading is the use of sophisticated technological tools to trade securities like stocks or options, and is typically characterized by several distinguishing features:...
  
  
• Stock valuation
  Stock valuation
  In financial markets, stock valuation is the method of calculating theoretical values of companies and their stocks. The main use of these methods is to predict future market prices, or more generally potential market prices, and thus to profit from price movement – stocks that are judged...
  
  
• Market Technicians Association
  Market Technicians Association
  The Market Technicians Association is a non-profit, global, professional organization of Technical Analysts based out of New York City. The MTA seeks to educate the financial community and public, increase the use of Technical Analysis, and maintain standards of expertise and ethics among...
  
  
• Intermarket analysis
  Intermarket analysis
  Intermarket Analysis is considered as a relationship, or a measurable correlation between certain markets. Intermarket analysis can be though of as a form of fundamental analysis, without the lag....
  
  
• Point and figure chart
  Point and figure chart
  Point and figure is a charting technique used in technical analysis, used to attempt to predict financial market prices. Point and figure charting is unique in that it does not plot price against time as all other techniques do...
  
  
• Candlestick chart
  Candlestick chart
  A candlestick chart is a style of bar-chart used primarily to describe price movements of a security, derivative, or currency over time.It is a combination of a line-chart and a bar-chart, in that each bar represents the range of price movement over a given time interval. It is most often used in...
  
  
• Dow Theory
  Dow Theory
  The Dow theory on stock price movement is a form of technical analysis that includes some aspects of sector rotation. The theory was derived from 255 Wall Street Journal editorials written by Charles H. Dow , journalist, founder and first editor of the Wall Street Journal and co-founder of Dow...
  
  
• Elliott wave principle
  Elliott wave principle
  The Elliott Wave Principle is a form of technical analysis that some traders use to analyze financial market cycles and forecast market trends by identifying extremes in investor psychology, highs and lows in prices, and other collective factors...
  
  
• Relative Strength Index (RSI)
  Relative strength index
  The Relative Strength Index is a technical indicator used in the technical analysis of financial markets. It is intended to chart the current and historical strength or weakness of a stock or market based on the closing prices of a recent trading period...
  
  
• Resistance
• Support
  Support (technical analysis)
  Support and resistance is a concept in technical analysis that the movement of the price of a security will tend to stop and reverse at certain predetermined price levels.- Support :...
  
  
• Trend line
  Trend lines (technical analysis)
  A trend line is formed when you can draw a diagonal line between two or more price pivot points. They are commonly used to judge entry and exit investment timing when trading securities. It can also be referred to a dutch line as it was first used in Holland.A trend line is a bounding line for the...