
CMT Level 1 Part 6 Flash Card

Quiz
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Other
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Professional Development
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Hard
Wayground Content
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20 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What does convergence indicate in momentum indicators?
Momentum indicators are moving against the price trend.
Momentum indicators are moving in tandem with the price trend.
Momentum indicators are not moving at all.
Momentum indicators are predicting a market crash.
Answer explanation
Convergence in momentum indicators means they are moving in tandem with the price trend, indicating that the momentum supports the current price direction, which can signal a continuation of the trend.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the primary function of oscillators in technical analysis?
Measure supply and demand over time
Indicate overbought or oversold conditions
Provide a broader view of market trends
Calculate average price movements
Answer explanation
The primary function of oscillators in technical analysis is to indicate overbought or oversold conditions. This helps traders identify potential reversal points in the market.
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the nature of indexes in technical analysis?
Bounded and periodic
Cumulative and continuous
Random and sporadic
Fixed and static
Answer explanation
Indexes in technical analysis are cumulative and continuous, reflecting the ongoing performance of a market or asset over time, rather than being fixed or sporadic.
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What does a divergence in technical analysis indicate?
Agreement between price trend and technical indicator
Disagreement between price trend and technical indicator
Constant price trend
Constant technical indicator
Answer explanation
A divergence in technical analysis indicates a disagreement between the price trend and the technical indicator. This can signal potential reversals or weakening trends, making it a critical observation for traders.
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the range of the Money Flow Index?
0 to 50
0 to 100
50 to 100
0 to 200
Answer explanation
The Money Flow Index (MFI) ranges from 0 to 100. It measures the buying and selling pressure, with values below 20 indicating oversold conditions and above 80 indicating overbought conditions.
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What does an RSI value above 70 typically indicate?
Oversold condition
Overbought condition
Neutral condition
Downward trend
Answer explanation
An RSI value above 70 typically indicates an overbought condition, suggesting that the asset may be overvalued and could be due for a price correction.
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How is the RSI calculated?
Using the average gains and losses over a specified period
By comparing to the broader market
By evaluating external factors
By analyzing trading volume
Answer explanation
The RSI (Relative Strength Index) is calculated using the average gains and losses over a specified period, typically 14 days. This method helps to determine whether an asset is overbought or oversold.
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