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100+ Free CMT Level III Practice Questions

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CMT Chartered Market Technician

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2026 Statistics

Key Facts: CMT Level III Exam

4 hrs

Exam Duration

CMT Program Guide 2026

~240 pts

Total Exam Points

CMT Association FAQ

95% / 5%

Application vs Ethics Weighting

CMT Program Guide 2026

120-160 hrs

Suggested Study Time

CMT Program Guide 2026

$875

Early Registration Fee

CMT Association FAQ

2x / yr

June & December Windows

CMT Association FAQ

CMT Level III is the integrative capstone of the CMT Program, run by the CMT Association. The 4-hour exam is delivered at Prometric centers or via ProProctor and is organized into grouped items that weave together two or more knowledge domains; some items are multiple choice, but most are short-answer constructed responses worth roughly 240 points total, with about one minute of time intended per point. The 2026 domains center on Application of Technical Analysis (about 95%) plus Ethics (about 5%), covering risk and portfolio management, asset relationships and intermarket analysis, classical and quantitative methods, behavioral finance, volatility analysis, and systems development. Ethics follows the adopted CFA Institute Code and Standards. Level III fees are USD 875 early, USD 1,075 standard, and USD 1,475 late, before local taxes.

Sample CMT Level III Practice Questions

Try these sample questions to test your CMT Level III exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1On the CMT Level III exam, most groups weave together two or more knowledge domains. What is the PRIMARY skill this design is intended to test?
A.Integration and application of multiple analytical tools into a coherent market decision
B.Rote recall of a single indicator's formula in isolation
C.Speed at answering simple multiple-choice items
D.Memorization of the Dow Theory tenets only
Explanation: Level III, 'The Work of a Technical Analyst,' tests synthesis: candidates must integrate concepts and tools (classical, quantitative, behavioral, risk) into applied decisions. Grouped items deliberately span domains to assess application rather than recall.
2A portfolio manager wants to limit the loss on a single position to no more than 1% of a $2,000,000 portfolio. If the entry is $50 and the protective stop is $48, how many shares can be bought?
A.8,000 shares
B.10,000 shares
C.20,000 shares
D.1,000 shares
Explanation: Risk per share = $50 - $48 = $2. Dollar risk allowed = 1% x $2,000,000 = $20,000. Position size = $20,000 / $2 = 10,000 shares. This fixed-fractional method ties position size to the stop distance, not to a fixed dollar amount.
3Value at Risk (VaR) at the 95% confidence level for a one-day horizon tells a technician that:
A.The portfolio will never lose more than the VaR figure
B.The average daily loss equals the VaR figure
C.Losses are expected to exceed the VaR figure on about 5% of days
D.The maximum possible loss equals the VaR figure
Explanation: A 95% one-day VaR is the loss threshold expected to be exceeded on roughly 5% of trading days (about 1 in 20). It is a quantile, not a maximum. Conditional VaR (CVaR/Expected Shortfall) measures the average loss in that tail beyond VaR.
4On a Relative Rotation Graph (RRG), a security plotted in the 'Leading' quadrant with the tail rotating toward the 'Weakening' quadrant most likely indicates:
A.A security uncorrelated with the benchmark
B.A new emerging leader to add aggressively
C.A lagging security improving rapidly
D.Strong relative strength that is beginning to lose momentum
Explanation: RRG quadrants rotate clockwise: Improving to Leading to Weakening to Lagging. A security in Leading with its tail curling toward Weakening still has strong relative strength (JdK RS-Ratio > 100) but declining relative momentum (RS-Momentum falling), an early warning to trim or watch.
5Anchored VWAP (AVWAP) differs from a conventional rolling VWAP primarily because AVWAP:
A.Begins its volume-weighted calculation from a user-selected significant bar (an anchor)
B.Resets at the start of every trading session automatically
C.Ignores volume and uses only closing prices
D.Can only be applied to intraday data
Explanation: AVWAP starts the cumulative volume-weighted average from a deliberately chosen anchor point such as an earnings date, a swing high/low, or a gap, rather than resetting each session. This lets the technician measure the average participant cost since a meaningful event.
6A trade has a 40% win rate. Winners average $900 and losers average $300. Using the expectancy formula, the expected value per trade is:
A.$120
B.$180
C.$600
D.-$180
Explanation: Expectancy = (Win% x Avg Win) - (Loss% x Avg Loss) = (0.40 x $900) - (0.60 x $300) = $360 - $180 = $180 per trade. A positive expectancy means the system makes money on average even with a sub-50% win rate, because winners are larger than losers.
7The CMT Association has adopted which body's Code of Ethics and Standards of Professional Conduct as the ethics framework tested on all three CMT levels?
A.The SEC Regulation Best Interest
B.FINRA Rule 2111
C.The CFA Institute Code of Ethics and Standards of Professional Conduct
D.The IFTA Ethics Charter
Explanation: The CMT Association adopted the CFA Institute Code of Ethics and Standards of Professional Conduct, with references adapted to CMT members and candidates. Ethics questions appear on all three exam levels, and the Standards of Practice Handbook is the recommended study guide.
8Under the adopted Standard on Diligence and Reasonable Basis, a CMT member publishing a technical buy recommendation must:
A.Guarantee the forecast will be profitable
B.Rely solely on a single indicator to stay consistent
C.Disclose only positive evidence supporting the call
D.Have a reasonable and adequate analytical basis supported by appropriate research and investigation
Explanation: Diligence and Reasonable Basis requires that recommendations rest on thorough, reasonable, and adequate analysis. A technician must investigate sufficiently and document a defensible basis; cherry-picking confirming evidence or guaranteeing outcomes violates the standard.
9In intermarket analysis, a sustained rise in the US Dollar Index (DXY) is conventionally a headwind for which asset class, all else equal?
A.Dollar-denominated commodities such as gold and crude oil
B.US Treasury bonds exclusively
C.Domestic small-cap value stocks only
D.Cash money-market funds
Explanation: A stronger dollar typically pressures dollar-denominated commodities because they become more expensive in other currencies, dampening demand. This inverse dollar-commodity relationship is a core intermarket linkage technicians monitor for asset rotation.
10A classical chart pattern produces a measured-move target. A trader designs the trade using the ATR-multiple rule for the protective stop instead of a fixed 3% rule because the ATR method:
A.Always produces a tighter stop than the 3% rule
B.Adapts the stop distance to the instrument's recent volatility
C.Eliminates the need to define a price objective
D.Guarantees the trade cannot be stopped out prematurely
Explanation: An ATR-multiple stop scales with the instrument's average true range, so volatile markets get wider stops and quiet markets get tighter ones. This volatility-normalized placement reduces premature stop-outs from normal noise relative to a one-size fixed percentage.

About the CMT Level III Exam

CMT Level III, 'The Work of a Technical Analyst,' is the capstone of the Chartered Market Technician Program and tests a candidate's ability to integrate concepts and tools into applied market analysis, position management, and risk control across all CMT knowledge domains.

Assessment

Question count not published by the exam provider

Time Limit

4 hours

Passing Score

Set by the CMT Association after each administration; no fixed public raw percentage

Exam Fee

USD 875 early, USD 1,075 standard, or USD 1,475 late Level III registration before local taxes (CMT Association / Prometric)

CMT Level III Exam Content Outline

Integrated

Asset Relationships & Intermarket Analysis

Relative strength, ratio charts, relative rotation graphs, sector rotation, intermarket links among the dollar, commodities, bonds, and equities, plus digital-asset relationships.

Integrated

Portfolio & Risk Management

Position sizing, fixed-fractional risk, VaR and CVaR, diversification and correlation, drawdown control, volatility targeting, and top-down portfolio risk budgeting.

Integrated

Classical & Quantitative Methods Integration

Classical chart patterns, candlesticks blended with Western tools, point-and-figure, anchored VWAP, Bollinger Bands, %b, polarity, and reward-to-risk trade design.

Integrated

Case-Based Market Analysis & Decision Making

Grouped multi-domain items requiring candidates to interpret charts, state and justify a recommendation, and synthesize trend, momentum, breadth, and relative strength.

Integrated

Behavioral Finance Application

Contrarian analysis, sentiment extremes, anchoring, loss aversion, confirmation and recency bias, overconfidence, groupthink, crowd behavior, and reflexivity.

Integrated

System Development & Evaluation

Systematic trading design, backtesting statistics, overfitting and walk-forward testing, expectancy, signal versus full testing, mark-to-market, and counter-trend models.

Integrated

Volatility Analysis

VIX, VVIX, SKEW and MOVE indexes, term structure and contango, implied versus realized volatility, volatility-based sizing, and using volatility in forecasting.

5%

Ethics & Professional Standards

The adopted CFA Institute Code of Ethics and Standards of Professional Conduct: diligence, suitability, loyalty, conflicts disclosure, priority of transactions, and independence.

How to Pass the CMT Level III Exam

What You Need to Know

  • Passing score: Set by the CMT Association after each administration; no fixed public raw percentage
  • Assessment: Question count not published by the exam provider
  • Time limit: 4 hours
  • Exam fee: USD 875 early, USD 1,075 standard, or USD 1,475 late Level III registration before local taxes

Keys to Passing

  • Work through all 100 available questions
  • Review every answer and explanation
  • Track weak areas and revisit them
  • Use our AI tutor for tough concepts

CMT Level III Study Tips from Top Performers

1Practice constructed-response timing: budget roughly one minute per point, so a 15-point item should take about 15 minutes.
2Drill integration, not isolated recall; Level III groups weave two or more domains into a single decision.
3Rehearse 'state and justify' answers by writing a clear conclusion followed by the integrated evidence that supports it.
4Study the adopted CFA Institute Code and Standards using the Standards of Practice Handbook, since ethics is not in the CMT textbooks.
5Master risk and position sizing math (fixed-fractional risk, reward-to-risk, VaR) because it threads through nearly every case.
6Build an error log that tags mistakes by domain, formula, and judgment so weak integration areas surface before test day.

Frequently Asked Questions

What format is the CMT Level III exam?

CMT Level III is a 4-hour computer-based exam organized into grouped items that weave together two or more knowledge domains. Some items are multiple choice, but most are short-answer constructed responses that require you to make a list, state and justify your analysis, or provide a similar written response.

How many questions are on the CMT Level III exam?

The CMT Association does not publish a fixed question count. The exam totals roughly 240 points across grouped multi-domain items, and guidance is that about one minute of time is intended per point. Our free practice bank provides 100 multiple-choice questions as knowledge prep across the same domains.

What knowledge domains does CMT Level III cover?

The 2026 CMT Program Guide groups Level III under Application of Technical Analysis (about 95%) and Ethics (about 5%). Topics include risk and portfolio management, asset relationships and intermarket analysis, classical and quantitative methods, behavioral finance, volatility analysis, and systematic development.

How much does CMT Level III cost in 2026?

The CMT Association lists Level III registration at USD 875 for early registration, USD 1,075 for standard registration, and USD 1,475 for late registration, before local taxes. Exams are offered in June and December windows.

What is the CMT Level III pass rate?

The CMT Association does not publish official Level III pass rates. Historically, Level III pass rates have commonly been reported in roughly the 50% to 60% range, but these figures are indicative only and not official.

How is ethics tested on CMT Level III?

The CMT Association has adopted the CFA Institute Code of Ethics and Standards of Professional Conduct as its ethics framework. Ethics questions appear on all three CMT levels, and the Standards of Practice Handbook is the recommended study guide because ethics is not covered in the CMT textbooks.

Where is the CMT Level III exam delivered?

CMT Level III is delivered on a computer at Prometric testing centers or through Prometric's ProProctor remote-proctoring service. Candidates should schedule well in advance of their chosen June or December exam window.

What are the prerequisites for CMT Level III?

You must pass CMT Level I and CMT Level II before registering for Level III. No degree is mandated, though the CMT Association recommends a university education and financial-market experience. Earning the CMT charter also requires membership and qualifying professional experience.