CMT Level I 2015

Exam length:

2 hours

Exam format:

Multiple Choice

Number of questions:
Exam date:
Estimated passing score:
Exam reading assignments
Course study notes:
Course multiple choice questions:

132 (15 unscored)

Spring and Fall
Not disclosed
1165 pages
377 pages
1080

CMT Level I 2015

What is the CMT Program?

What is 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 Market Technicians Association
(www.mta.org), the main 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.
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.
When and where is the exam held?
CMT Exam Levels I, II, and III are given twice a year, in April/May and October. The
CMT exam is administered all over the world at Prometric testing centers.
What are the CMT Program and Exam fees?
The CMT Program requires a onetime enrollment fee of $250 USD. All subsequent
fees shall be paid upon registration for each exam:
MTA Membership fee: $300.00 USD
CMT Program registration fee: $250.00 USD
Level I exam fee: $250.00 USD
Level II exam fee: $450.00 USD
Level III exam fee: $450.00 USD
What is the length and format of the three levels?
The CMT Program requires a onetime enrollment fee of $250 USD. All subsequent
fees shall be paid upon registration for each exam:
Level I: 2 hours and 132 Multiple Choice questions (12 unscored).
Level II: 4 hours and 170 Multiple Choice questions (20 unscored).
Level III: 4 hours and Essay questions totaling 240 points.
How are the exams graded?
The Level I and II exams are multiple choice and machine graded. The Level III exams are graded by CMT charterholders. Grading is based on a uniform answer key
for each question.
Do typographical and grammatical errors affect your Level III score?
Typographical and grammatical errors will not penalize you on the Level III exam.
Exams are graded solely on the application of the technical analysis concepts being tested. We encourage candidates to answer questions using short phrases or
bullet points where appropriate. Graders are aware that English might not be the
candidates first or primary language.
What is the passing score for each level of the exam?
The MTA goes through a rigorous standard setting process to determine the passing score. This can fluctuate from exam to exam, and for these reasons the passing
score is not disclosed.
When are exam results released?
The results for the CMT Level I and II exams are issued upon completion or exiting
the exams. CMT Level III exam results require a manual grading process and therefore generally are made available within approximately six to eight weeks of the
exam date.

CMT Level I 2015

Study Material: Study Notes + Practice Exams.

Financer Trading Study Notes offer a comprehensive review of all reading assignments
to be confident enough to pass the test. Because all reading assignments are reviewed and explained, you do not need to read the official books so you will save a lot
of study time. Additionally, our Practice Exams offer more than 1.000 multiple choice
questions with a similar or higher level of difficulty as the one you will face on the day
of the test. Financer Training Study material is the perfect partner to pass CMT level I.

Study Notes.
377 pages.
Review of all reading
assignments (1165
pages).

Practice Exams.
325 pages.
1080 multiple choice
questions (9 practice
exams).
All questions include
detailed answers.

How can I buy Financer Training Study Material?

Financer Training offer CMT candidates two methods of payment: bank wire or paypal.
If you are interested in paying by bank wire, the banking account data can be found in
our website (www.financertraining.com), where you can also find the paypal buttons
to pay with your credit card.

Price and format of Financer Training Study Material.

Financer Training Study Notes and Practice Exams can be bought as a package or
separately. Additionally, you can choose between a printed and an electronic or digital
version. The electronic version is offered in an encrypted PDF format. The candidate
will need to use the free software Prot-On (www.prot-on.com) to open the PDF files.
Note that the digital version is nonprintable.
The prices that you see in this brochure as well as in our website
(www.financertraining.com) include VAT and delivery costs for the printed version. The
discount offered for buying both items (study notes + practice exams) is 20% in the
hard copy version and 30% in the electronic version:

Study Notes Printed Version

Practice Exams Printed Version
Study Notes + Practice Exams (Printed)

312 (VAT included).

312 (VAT included).
624 (VAT included).
494 (VAT included).

Study Notes Digital Version

Practice Exams Digital Version
Study Notes + Practice Exams (Digital)

260 (VAT included).

260 (VAT included).
520 (VAT included).
364 (VAT included).

CMT Level I 2015

Study Material electronic (digital) version.

What is Prot-On software?
Prot-On is an application that ensures the files you send by email, upload to the
cloud or share on social networks can only be accessed by authorized users. Therefore, Prot-On is encryption software.
What is the Prot-On URL?
https://www.prot-on.com
How much does Prot-On software cost?
Prot-On is free software.
What do I need Prot-On software for?
If you have bought any digital Financer Training course, you will receive the study
material in PDF format. In order to open these files, you will need to be a Prot-On
registered user. Registration is free and it must be made with the same email address in which you have received the Financer Training PDF files.
Registration can be made using the invitation Prot-On email that you receive when
you buy a digital Financer Training course, or just entering the Prot-On site directly.
In any of these registration methods, do not forget using the same email address in
which you have received the Financer Training PDF files, and to keep your user and
password for future usage of Prot-On software.
Once you are a registered Prot-On user you have two ways to open Financer Training PDF files: first one is just installing the Prot-On software in your computer, and
second one is employing a simple process of drag-and-drop taking the PDF file and
dropping it into the Prot-On Drag and Drop section. Both options are explained in
full detail in the Prot-On website.
If I am already a Prot-On registered user, do I need to register again?
If you are already a registered user, you do not have to register again. Once you are
registered, keep your user and password for future protected documents.
Can I open the CMT study material offline?
Yes. As we illustrated in a previous answer, there are two ways to open the PDF
files. The most straightforward option is just saving the document and then drag
and drop the PDF file into the Drag 'n' Drop website section (there is a tutorial in
the site with a step by step explanation). Clearly, under this option we must be
online.
The second option is based on installing Prot-On software in our computer. Once it
has been installed and activated with our user and password, we could open the
PDF files even if we are offline. Every time we open a PDF file offline, we have a full
month to access the study material till the next time we open the study material
online. Once we open again the files online, time is restarted again and we have
another full month of offline studying.
How much time do I have to access the CMT study material?
You can open the CMT study material for an unlimited period of time. Once you buy
and download the Financer Training course, the PDF file could be opened with your
Prot-On user and password forever.
Can I open the study material PDF files without using Prot-On?
No. PDFs are encrypted and they can only be opened using Prot-On.
Can I print the PDF files?
No, the PDF files are nonprintable. If you prefer to read the information in a traditional way, we recommend you to buy the printed version.

CMT Level I 2015

In-Company training
Additionally to the Study Notes and the Practice Exams, Financer Training also offer
CMT level I in-company courses, with the following characteristics:
40 hours.
Free Study Notes + Practice Exams for each candidate.

Price of the In-Company courses:

If you are interested in a CMT LEVEL I course for your company or for a group of traders or Investors, ask for more information at: [email protected].

In-Company Program for CMT level I.

Topic 1. Theory and History
Topic 2. Markets
Topic 3. Market Indicators.
Topic 4. Construction.
Topic 5. Trend Analysis.
Topic 6. Chart and Pattern Analysis
Mock Exam I
Topic 7. Confirmation.
Topic 8. Cycles.
Topic 9. Selection and Decision.
Topic 10. System Testing.
Topic 11. Statistical Analysis.
Topic 12. Ethics.
Mock Exam II

2 hours
2 hours
2 hours
4 hours
6 hours
8 hours
2 hours
2 hours
2 hours
2 hours
2 hours
2 hours
2 hours
2 hours

CMT Level I 2015

CMT level I Topics & Question Weightings

Topic 1. Theory and History.

9%

11 questions

Topic 2. Markets.
Topic 3. Market Indicators.

5%
7%

6 questions
9 questions

Topic 4. Construction.

5%

6 questions

Topic 5. Trend Analysis.

16%

18 questions

Topic 6. Chart & Pattern Analysis.

23%

28 questions

Topic 7. Confirmation.

3%

4 questions

Topic 8. Cycles.

5%

6 questions

13%

15 questions

Topic 10. System Testing.

5%

6 questions

Topic 11. Statistical Analysis.

6%

7 questions

Topic 12. Ethics.

3%

4 questions

100%

120 questions

Topic 9. Selection and Decision.

CMT Level 1 Exam Reading Assignments:

Technical Analysis. 2nd Edition.
Charles Kirkpatrick & Julie Dahlquist.

The Definitive Guide to Point and Figure. 2nd Edition.

Jeremy Du Plessis.

The New Trading for a Living.

Alexander Elder.

Behavioral Finance, Understanding the Social, Cognitive, and Economic Debates.

Edwin Burton & Sunit Shah

Being Right or Making Money. 3rd Edition.

Ned Davis.

Standards of Practice Handbook. 11th Edition.

CFA Institute.

Visual Guide to Elliott Wave Trading.

Wayne Gorman & Jeffrey Kennedy.

CMT Level I 2015

What do CMT candidates say about our Study Material?

I have prepared my CMT-1 with a successful result within Alexeys Study Notes, my
own experience was good as the manuals are based entirely on the CMT reading assignments but are worked in a format that divides them in theme blocks; in each
block there is a topic under which all the chapters from all the authors are ensemble
to cover the topic in full; and this makes the material much easier to focus and follow
rather than being jumping from one chapter to another from the all different books.
Each block includes an exam at the end, with the entire past exam questions and a lot
new more; it proves your understanding of the topic and provides you with the practice
for the exam.
A great package for a successful preparation in terms of the manuals and the tutor
Alexey, as he had prepared all the material and is already a CMT charterholder, hence
he shares his experience as part of the preparation process.
On my exam all the questions-topics were covered on Alexeys Study Notes; and all my
doubts during the preparation were answered by him quickly. A great tutor that enjoys
his work and motivates you to keep going, thus I am getting onboard in Alexeys ship
for the level-2 CMT.
Mara Lpez Vzquez
CMT, EFA
Preparation materials for the CMT certificate of Mr. De La Loma are an invaluable aid
to the successful tacking of the official examinations. The clarity in the exposition of
the different issues and the interesting preparation questions, show the author's expertise on the subject.
Iaki Arcocha Torres
CFA, CMT, CIIA, CAIA, FRM
I found the notes were done very professional, I passed with flying colours, and the
best part is the material is condensed dramatically no fluff all fact.
David Waite
CFA
I found myself pick up the material pretty quickly. I have actually read all 4 books on
the CMT level I reading list but honestly, I couldn't comprehend what I read and sometimes was so confused. Your study notes are well-organized, comprehensive yet
clearly explained to the details which helped clear all the confusion. Getting your
study notes + practice exams was such a right decision.
Kim Ho
It seems like a mess in my mind after finishing CMT level 1 reading assignments.
However, when reviewing by using Alexey's study notes everything becomes clearer.
All knowledge in four books is systematized carefully by dividing in well-organized
blocks with unforgettable key points. Alexey's notes as well as practice exam have
served me well in CMT level 1 exam and now I am ready for the next level together
with his CMT level 2 materials.
Thuy Nguyen Thu
Alexey De La Lomas CMT material is concise, yet thorough. The combination of text
summaries and practice exams more than adequately prepared me for the exams. I
would certainly recommend it. The material is much harder than the exam so I was
well prepared.
William Skultety
"The study notes and practice exams of Alexey De La Loma helped me a lot, not only
to pass my exam but it also helped me to change my analysis and my trading. This is
good stuff and I usually come back to check it."
Guillermo Martn Chvez

CMT Level I 2015

What do CMT candidates say about our Study Notes?

Alexey De La Lomas study notes and practice exams for the CMT certification is
comprehensive. I have relied only on his study notes to pass the examinations for the
CMT certification. The breadth and depth of reading and knowledge required to gain
the CMT certification is considerable and Alexey De La Lomas study notes cover the
MTA syllabus comprehensively in a clear and succinct manner.
The practice exams books are very relevant and they highly reinforce the material covered. It is probably the best revision aid for the CMT certification on the market. I
would recommend it for anyone perusing the CMT certification as well as those interested in gaining proficiency in T.A., its history and applicability.
Prop trader/market maker for UKs largest prop trading firm
"At first I wasn't very sure if I should take the exam in October as I just had less than 3
weeks to prepare it. Alexey's ultra high quality exam prep and study notes enabled me
to shorten 80% of study time. I got my first level CMT completed and I am now very
confident to achieve my goal to become a charterholder. Without Alexey's test prep
material I wouldn't not have been able to achieve it so fast! For those who are serious
about CMT exam, please make no other choice."
Meng Kei Sou
Passed CMT Level One in October 2014.
"I am pleased to say I passed the CMT Level 1 exam last week and I found the quality
of your materials and particularly the exam questions to be excellent and allowed me
to better prepare myself."
Alasdair Stewart
CFA, FRM, CAIA.
"I have successfully completed CMT Level-1, and I o personally believe that all credit
goes to your study notes and your practice exam paper, because of the way you have
presented everything. It is very simple and easy to understand. Your study notes and
practice exams really cover everything which is required to pass CMT Level-1 and because of that reason I have decided to go for your CMT Level-2 study notes + practice
exams."
Md. Yousuf Al-Amin.

CMT Level I 2015

Alexey De La Loma Jimnez

CFA, CAIA, CMT, EFA, FRM
Academic Education.

[email protected]

Degree in Mathematics in process. UNED. Expected in 2015.

PhD in Applied and Social Statistics in process. UNED. Expected in 2016.
Degree in Business Administration. University Carlos III de Madrid. 1997.
Degree in Economics. University Carlos III de Madrid. 1995.

Financial Certifications.
CFTe. Certified Financial Technician. 2015.
CFA. Chartered Financial Analyst. 2013.
FRM. Financial Risk Manager. 2008.
CAIA. Chartered Alternative Investment Analyst. 2008.
EFA. European Financial Advisor. 2008.
CMT. Chartered Market Technician. 2007.

Professional Experience.
From 2001, he has been trading for his own account as a prop trader, and he is
an expert in trading systems, money management algorithms, and technical
analysis. He is currently teaching at some universities and business schools as:
Universidad San Pablo CEU, Universidad Abat Oliba, URJC, IEB, FEF, MEC, and
he also teaches some in-company courses
He started his career in international companies as CLH, Arthur Andersen,
Banco de Santander and IBM, with broad international experience (Great Britain, Italy, Portugal, Chile, Peru, Argentina, and Saudi Arabia).

Teaching Experience.
Universidad CEU San Pablo (Madrid).
Universidad Rey Juan Carlos (Madrid).
Instituto de Estudios Burstiles (Madrid).
Fundacin de Estudios Financieros (Madrid).
Universidad CEU Abat Oliba (Barcelona).
Money Experts Club (Riyadh).
In-Company Courses: banco Santander, Bankia, R&B PropTraders, Sanabil Investments, XTB, Sistemas Informticos Atlas, etc.

10

CMT Level I 2015

TOPIC 1. THEORY AND HISTORY.

TOPIC 2. MARKETS.

..

1.1. History of technical analysis: from Charles

Dow to Welles Wilder.
1.2. Introduction to technical analysis.
1.2.1. Fundamental vs. technical approach.
1.2.2. The critical view of fundamental
analysis from the technical perspective.
1.3. Basic principles of technical analysis.
1.3.1. Why do markets trend and how are
trends identified?
1.3.2. Definition of technical analysis.
1.3.3. The principles or axioms of technical
analysis.
1.3.4. Advantages and disadvantages of
technical analysis.
1.4. The technical analysis controversy.
1.4.1. Do markets follow a Random Walk?
1.4.2. Are markets Efficient?
1.4.3. Pragmatic technical analysis criticisms.
1.5. Introduction to Behavioral Finance.
1.5.1. Behavioral finance vs. traditional
finance.
1.5.2. Risk and return: the simplest view.
1.5.3. The capital asset pricing model
(CAPM).
1.5.4. Relevance of the CAPM theory.
1.5.5. The forerunners to behavioral finance.
1.6. Noise Traders.
1.6.1. Noise traders, the law of one price,
and fungibility.
1.6.2. Noise traders as technical traders.
1.6.3. Herd instinct models.
1.7. Mass Psychology.
1.7.1. What is price?
1.7.2. What is the market?
1.7.3. The trading scene.
1.7.4. The market crowd and you.
1.8. Charles Henry Dow, founder and editor of
the Wall Street Journal (WSJ).
1.9. Basic tenets of Dow theory.
1.9.1. The averages (indices) discount
everything.
1.9.2. The market has three movements.
1.9.3. Major or primary trends have three
phases.
1.9.4. Volume goes with the trend.
1.9.5. The two averages must confirm
(principle of confirmation).
1.9.6. Price action determines the trend.
1.9.7. Lines indicate movements and may
be a substitute for secondary trends.
1.9.8. Only closing prices used.
1.10. Dow theory in practice.
1.10.1. Primary or major trends.
1.10.2. The Dow theorys defects.
1.10.3. The Dow theory in the 20th and
21st centuries.

2.1. An overview of Markets.

2.1.1. Markets classification.
2.1.2. Commodities futures.

TOPIC 3. MARKETS INDICATORS.

.
3.1. How is the market measured: Index Construction.
3.2. Market Strength.
3.2.1. Market Breadth.
3.2.2. Up and Down Volume Indicators.
3.2.3. Net New Highs and Net New Lows.
3.2.4. Diffusion Indicators.
3.2.5. Very short-term indicators.
3.3. Flow of Funds.
3.3.1. Funds in the marketplace.
3.3.2. Funds outside the marketplace.
3.3.3. The cost of funds.
3.3.4. FED policy.
3.3.5. Long-term interest rates (the bond
market).
3.3.6. Summary on interest rate changes
by Martin Pring.
3.4. Sentiment.
3.4.1. Introduction.
3.4.2. How is sentiment of uninformed
players measured?
3.4.3. How is sentiment of informed players measured?
3.4.4. Sentiment in other markets.
3.4.5. Conclusion.

4.3.2. 1-box reversal charts.

4.3.3. 3-box reversal charts.
4.3.4. 2-box and 5-box reversal charts.
4.3.5. Close Only Method vs. High/Low
Method.
4.3.6. Log scale vs. Arithmetic scale Point
and Figure Charts.
4.4. Understanding Point and Figure Charts.
4.4.1. Point and Figure Signals.
4.4.2. Double-top and Double-bottom.
4.4.3. Triple-top and Triple-bottom.
4.4.4. The strength of the pattern.
4.4.5. Catapult patterns.
4.4.6. Triangles.
4.4.7. Traps and Shakeouts.
4.4.8. Broadening patterns.
4.4.9. Bullish and Bearish pattern reversed.
4.4.10. Poles.
4.4.11. Congestion Analysis.
4.4.12. Trendlines on Point and Figure
charts.
4.4.13. Point and Figure charts Summary.
4.5. Projecting Price Targets in Point and Figure
Charts.
4.5.1. Horizontal counts on 1-box reversal
charts.
4.5.2. Horizontal counts on 3-box reversal
charts.
4.5.3. Vertical counts on 3-box reversal
charts.
4.5.4. Things you should know about Point
and Figure counts.
4.5.5. Counts on log scale.
4.5.6. Risk and Reward.
4.5.7. Summary.

TOPIC 5. TREND ANALYSIS.

TOPIC 4. CONSTRUCTION.
.
4.1. Charts.
4.1.1. What is a ticker tape?
4.1.2. Types of linked futures contracts.
4.1.3. Line charts.
4.1.4. Bar charts.
4.1.5. Candlestick charts.
4.1.6. EquiVolume and CandleVolume.
4.1.7. Chart principal topics.
4.1.8. Timeframe: intraday, daily, weekly,
monthly, etc.
4.1.9. Arithmetic vs. Semilogarithmic
scale.
4.2. Introduction to Point and Figure.
4.2.1. History and development.
4.2.2. Where did Point and Figure charts
get their name?
4.3. Characteristics and Construction of Point
and Figure Charts.
4.3.1. Characteristics of Point and Figure
Charts.

.
5.1. Trends.
5.1.1. Regression lines.
5.1.2. Trendlines.
5.1.3. Trend Channels.
5.1.4. Double trendlines and trend ranges.
5.1.5. Methods and techniques to identify
trends (Alexander Elder).
5.2. Moving averages.
5.2.1. How is a simple moving average
(SMA) calculated?
5.2.2. Other types of moving averages.

11

CMT Level I 2015

TOPIC 6. CHART AND PATTERN ANALYSIS.

.
6.1. Support and resistance.
6.1.1. Why do support and resistance occur?
6.1.2. How are important reversal points
determined?
6.1.3. Estimating support-resistance potential.
6.1.4. Pull-backs and Throw-backs.
6.1.5. Trading rules and true and false
breakouts.
6.2. Price patterns.
6.2.1. Rectangles.
6.2.2. Double tops and bottoms.
6.2.3. Triple tops and bottoms.
6.2.4. Head and Shoulders and Reverse
H&S.
6.2.5. Descending triangles.
6.2.6. Ascending triangles.
6.2.7. Symmetrical triangles.
6.2.8. Breakout Rules in Standard Triangles.
6.2.9. Broadening patterns.
6.2.10. Diamond Top.
6.3. Smaller price patterns.
6.3.1. Wedge and Climax (Kirkpatrick).
6.3.2. Rounding tops and bottoms.
6.3.3. Flags and Pennants (Half-mast
formations).
6.4. Chartism Case Studies.
6.4.1. A case study of the U.S. Company
Apple (Charles Kirkpatrick).
6.4.2. A case study of the Spanish Stock
Market Index IBEX-35.
6.4.3. A case study of the U.S. Company
Amazon.
6.5. Gaps (additional reading).
6.5.1. Major Gaps.
6.5.2. Minor gaps.
6.5.3. Opening Gaps.
6.5.4. Island Reversals.
6.6. Introduction to Candlestick.
6.7. Candlestick Charts Construction.
6.8. Candlestick Reversal Patterns.
6.8.1. Hammer and Hanging Man
(Umbrellas).
6.8.2. Engulfing Patterns.
6.8.3. Dark cloud cover pattern (semiengulfing pattern).
6.8.4. Piercing line (semi-engulfing pattern).
6.9. Stars in Candlestick Charting.
6.9.1. Morning (doji) star.
6.9.2. Evening (doji) star.
6.10. More Candlestick Reversal Patterns.
6.10.1. The Harami (Cross) pattern.
6.10.2. Tweezers Tops and Bottoms.
6.10.3. Belt-hold lines.
6.10.4. Upside-Gap Two Crows.
6.10.5. Three black crows.
6.10.6. Three white soldiers.
6.10.7. Counterattack lines or meeting
lines.
6.10.8. Long-term top and bottom patterns.
6.11. Candlestick Continuation Patterns.
6.11.1. Windows (Ku).
6.11.2. Tasuki gap.
6.11.3. Rising and falling three methods.
6.11.4. Separating lines.
6.12. The Magic of Doji.
6.12.1. Northern Doji.
6.12.2. Long-legged Doji, Gravestone Doji,
and Dragonfly Doji.
6.12.3. Tri-star pattern.
6.13. Theories of Market Structure: Elliott Wave.
6.13.1. Elliott Wave Theory (EWT).
6.13.2. Nature and personality of the common 5+3 wave structure.

6.13.3. Wave function and wave mode.

6.13.4. Motive waves.
6.13.5. Corrective waves.
6.13.6. Guidelines and general characteristics of EWT.
6.13.7. Projected Targets and Retracements.
6.13.8. Using EWT.
6.13.9. Fibonacci Sequence.
6.13.10. Five ways the Wave Principle
improves trading (Jeffrey Kennedy).
6.13.11. Guidelines for trading specific
Elliott Wave patterns (Jeffrey Kennedy).
6.13.12. EWT in the real world, a severe
critic.
6.14. Oscillators and Indicators.
6.14.1. Indicators vs. Oscillators.
6.14.2. Momentum Principles (Martin
Pring).
6.14.3. Moving Average Convergence
Divergence (MACD).
6.14.4. Rate of Change (ROC).
6.14.5. Relative Strength Index (RSI).
6.14.6. Chande Momentum Indicator
(CMO).
6.14.7. Relative Momentum Index (RMI).
6.14.8. Trend Deviation (Price Oscillator).
6.14.9. Stochastic Oscillator.
6.14.10. Williams %R.
6.14.11. Commodity Channel Index (CCI).
6.15. Directional Movement and Bands.
6.15.1. Directional movement and ADX.
6.15.2. Determining Trend and Trading
Range.
6.15.3. Envelopes, Bands and Channels.

TOPIC 7. CONFIRMATION.
.
7.1. Volume.
7.1.1. What is Volume?
7.1.2. General interpretation of volume.
7.1.3. Volume spikes and volume dips.
7.2. Open Interest.
7.3. Volume Indicators.
7.3.1. OBV. On Balance Volume.

TOPIC 8. CYCLES.
.
8.1. Cycles.
8.1.1. Cycle elements.
8.1.2. Cycle principles.
8.1.3. Identifying and projecting cycles.
8.1.4. Cycle analysis conclusion.
8.2. Short-term and long-term cycles in real
markets.
8.2.1. Short-term cycles: temporal or stationary patterns.
8.2.2. Long-term cycles.

TOPIC 9. SELECTION AND DECISION.

.
9.1. Introduction to Relative Strength.
9.2. Relative Strength as a Criterion for Investment Selection
9.2.1. Construction of the data file.
9.2.2. Conclusions.
9.2.3. Limitations.
9.3. Forecasting Techniques (pattern and trend
recognition).
9.3.1. Intermarket Analysis: Secular and
Cyclical Emphasis.
9.3.2. Stock market Sector rotation.
9.4. The Theory of Contrary Opinion.
9.4.1. The crowd versus the contrary opinion.

9.4.2. Three steps to forming a contrary

opinion.
9.4.3. Applying technical analysis and the
contrary opinion.
9.5. Strategic Models.
9.5.1. Being right or making money.
9.6. The Model-Building Process.
9.6.1. Model inputs: internal and external
indicator.
9.6.2. External indicators.
9.6.3. Internal indicators.
9.6.4. Putting indicators together and
Conclusions.
9.7. A complex stock market model and a simple bond market model.
9.7.1. Tape component (40% of the Fab
Five).
9.7.2. The sentiment component (20% of
the Fab Five).
9.7.3. The monetary component (20% of the
Fab Five).
9.7.4. The Fab Five combo component (20%
of the Fab Five).
9.7.5. A simple bond market model.

TOPIC 10. SYSTEM TESTING.

.
10.1. Introduction to Mechanical Trading Systems (Additional Reading).
10.1.1. Advantages vs. Disadvantages of
Mechanical Trading Systems.
10.1.2. Design of a successful trading
system.
10.1.3. Trading system examples.
10.1.4. Trading systems summary.
10.2. System Design and Testing (Kirkpatrick).
10.2.1. Mechanical (NonDiscretionary)
versus Discretionary Systems.
10.2.2. Designing a Trading System.
10.2.3. Types of Technical Trading Systems.
10.2.4. Testing a System: Special Data
Problems.
10.2.5. Optimization.
10.2.6. Backtesting and Measuring Results
for Robustness.
10.2.7. What is a good trading system?
10.3. Money Management and Risk Management (Kirkpatrick).
10.3.1. Risk and Money Management.
10.3.2. Testing money management strategies.
10.3.3. Money Management Risks.
10.3.4. Protective Stops.
10.3.5. Trailing Stops.
10.3.6. Profit Target and other Stops.
10.3.7. Monitoring systems and portfolios.
10.4. Types of Orders and other Trader Terminology (Kirkpatrick).
10.4.1. Trading glossary.
10.4.2. An Order Ticket.

TOPIC 11. STATISTICAL ANALYSIS.

.
11.1. Basic Statistics (Kirkpatrick and Bauer).
11.1.1. Descriptive Statistics.
11.1.2. Modern Portfolio Theory.
11.1.3. Performance Measure Examples.

TOPIC 12. ETHICS.

.
12.1. Code of Ethics and Standards of Practice
Handbook (CFA).