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What Does a Chartered Market Technician (CMTs) Do?

Ashley Chorpenning
cmt
cmt

Do you ever wonder who’s behind the trading desk, helping your financial firm find the
best investment mix? In many cases, you’ll find a Chartered Market Technician (CMT). Read on to discover how Chartered Market Technicians achieve their designation and how they play a crucial role in managing your wealth.

What is a Chartered Market Technician?

A technical analyst researches and analyzes investments based on their intrinsic value and market prices across all asset classes. They look for patterns in pricing and historical price movement to identify key indicators based on market psychology. Essentially, technical analysts observe the market and use their statistical formulas to make predictions about future performance.

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A Chartered Market Technician (CMT) is a technical analyst professional who has completed the CMT designation. It is the highest certification within the industry and is well-known by other industry professionals around the world. Professionals who achieve the CMT designation have proven extensive knowledge of investment risk in portfolio management. Essentially, a CMT designation is the gold standard in the technical analysis field.

Chartered Market Technician Qualifications

cmt
cmt

To become a Chartered Market Technician (CMT), you must meet rigorous standards over three levels. Once completed, a CMT is knowledgeable in risk management.

The CMT Association is a global credentialing body that oversees, organizes, and develops the CMT program. To achieve the CMT designation candidates must pass three exam levels, complete the membership application, and agree to the CMT Association’s code of ethics. Candidates must first join the CMT Association as an affiliate member and then register for the CMT program. Candidates can pay a one-time $250 enrollment fee for exams, or pay $325 to become a CMT association member.

Once candidates register for the program, they can pay and sign up for the CMT exam. The curriculum is designed to promote a candidate’s expertise in the field of technical analysis. This program is also designed for self-study. The CMT program is available through education services Wiley.

CMT Level I Exam

The CMT Level I exam tests the candidate’s comprehension of the basic tools of a technical analyst. Essentially, it’s an entry-level comprehension of technical analysis. Some of the working knowledge a candidate must possess includes statistic and pattern analysis, ethics, selection and decision-making, and key market indicators. The exam costs $450 to $750, depending on when you registers, but CMT Association members pay only $275 to $575.

Once a candidate passes the CMT Level I exam, there is no time limit for completing the rest of the exams.

CMT Level II Exam

For candidates to pass the CMT Level II exam, they must prove a deeper level of analysis and usage of technical tools. Candidates must demonstrate proficiency in applying techniques and analysis theories to pass the Level II exam. The exam costs $650 to $1,050 (depending on when your register). However, CMT Association members can pay $475 to $875.

CMT Level III Exam

The CMT Level III exam tests the candidates’ development of research opinions, investing approaches, and trading decisions based on charts and data. During the CMT Level III exam, all candidates must analyze a specific case study and provide recommendations. They must then justify their recommendations by information given. The costs for this exam are similar to the Level II exam. However, the cost of study materials for each exam ranges from $225 per level in print or e-book formats, or $275 per level in both formats.

In addition to passing the three exams, candidates must receive referrals from at least three sponsors who are already CMT Association members. When they complete their final exam, they must submit a membership application with three sponsorship questionnaires.

Not only do all applicants have to have referrals from current members, but they have to have at least three years of professional work experience in the field. CMTs who have completed the CMT program only need three years of professional experience to qualify while non-CMT candidates need five years of experience for membership approval. Lastly, all candidates must agree to CMT’s Code of Ethics and Standards.

Meanwhile, the CMT Association has the final say in all candidate approval. After a candidate completes the program and submits all of the correct documentation, the association will review their application. This process can take between six and eight weeks to complete.

Chartered Market Technician Continuing Education

While the CMT Association doesn’t require CMTs to complete continuing education credits to maintain membership or status, they encourage these professionals to partake in continuing education opportunities. However, all members must pay the $325 annual renewal fee to keep their membership active.

Job Role and Responsibilities

Typically, stock brokerage firms, investment banks, mutual fund companies, pension fund management companies, and hedge funds hire CMTs to analyze their securities and investment methods. The CMTs they employ will use a broad approach to combine both technical and fundamental strategies to predict future performance and security prices of companies and the economy. Based on their analysis of the economy and companies they follow, CMTs will make, buy and sell recommendations for their portfolio or their clients.

As an investor, you may not work directly with a CMT. However, if you partner with a financial planner, it’s possible a CMT is making the recommendations for your portfolio.

The Bottom Line

cmt
cmt

The title CMT demonstrates a mastery of technical analysis and portfolio management. Through rigorous exams, industry experience, and high levels of ethical standards, these individuals have proven to be top of the line professionals. While you may not work with them directly, they may be helping you achieve your financial dreams.

Investing Tips

  • If you think a good CMT could help your portfolio, you may want to seek a financial advisor at a firm that uses one. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.

  • Before you go tracking down a financial advisor with a good CMT, do you know how much investment risk you can tolerate? Do you know how much you want your investment to grow over time? Have you checked how much inflation and capital gains taxes will affect your investment? If not, SmartAsset’s investing guide can help you take some necessary steps toward your investment future.

Photo credit: ©iStock.com/Artem Peretiatko, ©iStock.com/PeopleImages, ©iStock.com/ipopba

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