Chartered Market Technician

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Chartered Market Technician (CMT) is a professional designation that confirms proficiency in technical analysis of the financial markets, and membership in the Market Technicians Association.

The CMT designation requires completion of an education program and examination series in technical analysis. The Market Technicians Association (MTA) oversees the program curriculum and administration of exams. Candidates who pass all three examination levels of the program earn the Chartered Market Technician designation, which certifies that the individual is competent in technical analysis.[1]

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[edit] The CMT program

The Chartered Market Technician program is a primary part of the MTA's larger mission to:

  • "Educate the public and the investment community to the value and universality of technical analysis
  • "Attract and retain a membership of professionals devoting their efforts to using and expanding the field of technical analysis and sharing their body of knowledge with their fellow members
  • "Establish, maintain and encourage the highest standards of professional competence and ethics among technical analysts."

The MTA began to develop the CMT program in 1985. Just as other professional organizations have standards of competence for members, so the CMT designation provides a recognized standard of proficiency for technical analysts. (The CMT examinations are administered by Thomson Prometric, which administers other professional tests, such as the CPA exam.)

The three-part CMT examination includes:

  1. Definitions ("terminology, charting methods, and ethics")
  2. Application (concepts such as "Dow Theory, Elliott Wave, intermarket, etc.")
  3. Integration ("competency in ethics and in rendering technical opinions integrating multiple aspects of technical analysis. Essay responses should be of the quality of technical research published by practicing CMT charterholders.")

[edit] Who seeks the CMT designation

The Chartered Market Technician designation is sought by individuals with a career in finance, such as financial planners and advisers, securities dealers, market analysts, money managers and others. Professionals who receive the CMT designation must also become members of the MTA in order to claim the designation. Membership requires sponsorship by three MTA members, a pledge to abide by the MTA's code of ethics, and final approval of the applicant by the MTA board of directors.

Individuals who aspire to greater expertise in the use of technical analysis can go through the CMT examination program. Those who are using technical analysis in a non-career capacity can join the MTA as affiliates.

[edit] The CMT designation status

In February 2005, the U.S. Securities and Exchange Commission recognized the Chartered Market Technician designation as an alternative to the Analysis Series 86 Examination, as part of the rule changes filed by the NASD and NYSE.[2] Jordan E. Kotick, CMT, then-President of the MTA and Global Head of Technical Analysis for Barclays Capital, said

"The regulators have acted wisely to protect investors. Technical analysis is intrinsically different from fundamental analysis. The 86 Exam is an excellent exam but it tests for competence with regard to fundamental analysis. Technical analysts should have to show competence with respect to their chosen field of technical analysis. The CMT is the appropriate test for technical analysis and MTA is pleased that the regulators have recognized it."[3]

This recognition on the part of securities regulators and the self-governing bodies of the securities industry (NASD and NYSE) provided significant new credibility to technical analysis.

[edit] See also

[edit] References

  1. ^ Market Technicians Association
  2. ^ SEC recognition of CMT
  3. ^ Market Technicians Association article