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Chartered Market Technician

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on June 13, 2022

The Chartered Market Technician (CMT) designation is the global standard in technical analysis and trading.

A Chartered Market Technician (CMT) is a specialist in the field of markets who works with brokerage firms to help clients trade on exchanges and options exchanges.

Essentially, a CMT looks at price trends and analyzes current market conditions to aid investors in making sound financial decisions. They look at how a particular market or market trend will affect other related securities or industries, what strategies work best for different groups of investors within their client base

They also check which companies have the potential to be bought out by larger corporations, and even economic trends that will affect various industries over time.

They use their findings to create investment recommendations for clients through research reports from their firm’s analysis team. They also provide guidance on when it may be advisable not to invest altogether.

The Role of a Chartered Market Technician

Although a CMT is considered to be a specialist, there are several different roles that they can take on within the brokerage firm they work for.

For example, a CMT might manage funds or trade options with clients as part of an investment team, but would have guidance from the brokerage company’s sales and trading department.

They are also responsible for giving training to any new employees within the company who are looking to learn more about how markets work.

A CMT’s job is essential in today’s financial market since they help people to understand how market trends change based on current economic factors.

Responsibilities of a Chartered Market Technician

Analyzing Market Data

A CMT is in charge of analyzing different market data and coming up with recommendations, which is sent out through reports or memos to clients.

When creating content for these reports, they consider both general trends along with specifics that cover changes in the industry, political issues that may affect an outcome, and other potential events that could influence either stock price or trading volume.

The information gathered by the CMT is then reviewed by their company’s senior analyst before it gets released to the public.

Helping Clients Choose Appropriate Investments

A CMT meets with their clients to understand what kinds of investments they would like to make, or if they are already invested, how much money they have currently in the market.

A CMT will take into consideration factors such as age, income level, and overall financial blueprint when trying to determine where a client should best put their money.

Recommending Certain Companies for Investment

When creating recommendations for clients on which stocks or ETFs (exchange-traded funds) to buy into for maximum profit potential, a CMT takes into account several different things.

These may include management changes at that company, any changes in company policies that may affect its bottom line over time, industry trends, earning reports from the business itself or other publicly-traded companies in the same industry, and much more.

Once he or she has come up with a list of suggestions for each client in his or her firm’s portfolio that are looking to invest in certain stocks or ETFs, they will report this information to their sales team.

They then work together to put together trade recommendations for their clients, which can be executed almost instantly on an exchange such as E-Trade where all the trades take place second by second.

Working With the Brokerage Firm’s Trading Teams

CMTs will be working with the brokerage firm’s trading teams to implement trading strategies based on market conditions. They will discuss potential trades with their peers and analyze results together so that there is consensus on whether or not it was a good decision.

The Chartered Market Technician Examination

To earn the right to use the CMT designation, one must pass three comprehensive examinations administered by the CMT Association. It is the global credentialing body for the trading and brokerage industry.

CMT Level I Exam

The first level aims to test the examinee’s comprehension of technical analysis and market trends.

The areas covered include: how to read and interpret stock and futures charts, identifying and analyzing different price patterns and trends, and the ability to identify levels of support and resistance for a security.

CMT Level II Exam

The second test is designed to examine the candidate’s usage of technical tools and strategies.

This includes understanding relationships between a security’s price and volume, market indicators such as moving averages and oscillators, forecasting future prices of a security based on past data, determining entry points for investments while watching for potential exit points at the same time, and more.

CMT Level III Exam

The final test is the most complex of all three levels because it covers virtually every area that one might need to know in order to work with clients appropriately.

Some of the topics covered include: advanced technical analysis tools, investment approaches, types of securities, basic valuation concepts, taxes and portfolio management, global markets, options trading strategies, futures contracts terms and prices to understand the fundamentals.

Final Thoughts

By attaining the designation as a Chartered Market Technician, individuals demonstrate knowledge in providing advice on a range of investments to clients based on a deep understanding of how the stock market works.

Through this role, they help customers to shape their money management choices so that they have a better chance at achieving financial goals.

The Chartered Market Technician designation was created by the CMT Association to stand as 'the global benchmark of achievement for technical analysts.' It demonstrates competence of market technicians who work in the financial services industry, which includes investment advisers, brokerage firms, banks and retail brokerages.
The primary way to prepare for the CMT exam is through self-study. However, there are also many seminars and workshops offered by the CMT Association that you might want to consider taking part in to boost your knowledge.
A Chartered Market Technician goes through three levels of exams administered by the CMT Association and each level tests more than just knowledge of how the market works. It also tests one's ability to apply that knowledge into practical situations that help clients achieve financial goals while considering all of the risks involved with investing.
Chartered Market Technicians are employed by all kinds of financial institutions, including major brokerage firms. Some CMTs work with investors who have enough money to fuel their own portfolios, while others develop strategies for institutional clients or even create trading models that can be used in the development of new financial products.
In general, those with this designation earn more than those without it. A CMT receives privileged access to great deals because their clients trust that they'll be able to provide appropriate investment strategies due to market expertise and knowledge about how the stock market works.

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

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