Free CMT-LEVEL-II Exam Braindumps (page: 25)

Page 24 of 66

Which of the following is true of the three black crows' pattern?

  1. The color of the real bodies is of utmost importance to its significance
  2. It is continuation pattern
  3. The three candles do not have to be on consecutive trading periods
  4. When succes

Answer(s): A



Based on the chart below, interpret the on balance volume (OBV) indicator with respect to price action:

  1. Prices are consolidating but OBV direction has turned higher which indicates accumulation by long term traders.
  2. Negative divergence between price and indicator suggest distribution is taking place at top.
  3. Prices are higher but OBV is sideways which can't be interpreted.
  4. Positive divergence between price and indicator suggest uptrend is weak and near reversal.

Answer(s): B



How would one improve a trading system utilizing band penetrations as trading signals which is giving too many unprofitable trade signals?

  1. Narrow the bands
  2. Widen the bands
  3. Utilize a shorter time horizon
  4. Utilize stop loss orders

Answer(s): B



Prior to a market top, what would one expect to see in a VIX reading?

  1. Increasing VIX levels, as more investors are adding protective measures
  2. An overbought VIX level, given an increase in long term S&P futures contracts.
  3. Generally low VIX levels, as there is often complacency among traders prior to tops
  4. An oversold VIX level, given a decrease in long term S&P futures contracts.

Answer(s): C






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