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Key Facts: NCFM Technical Analysis Exam

60 questions

The NCFM Technical Analysis Module exam contains 60 multiple-choice questions

NSE Academy syllabus

2 hours

Candidates are given 120 minutes to complete the online exam

NSE Academy assessment structure

60% pass

The passing score required to obtain the NCFM certificate is 60%

NSE Academy curriculum

25% negative

Each wrong answer carries a penalty of 25% (0.25 marks deducted)

NSE Academy rules

Rs. 2,596

The registration fee for the NCFM Technical Analysis exam is Rupees two thousand five hundred ninety-six (inclusive of GST)

NSE Academy fee structure

5 years

The NCFM Technical Analysis certification is valid for five years

NSE Academy validity rules

7 chapters

The curriculum is divided into seven distinct, weighted chapters

NSE Academy syllabus

100

Free original practice questions are provided here

OpenExamPrep

The NCFM Technical Analysis Module is an intermediate certification by NSE Academy for finance professionals, analysts, and traders. The exam consists of 60 multiple-choice questions to be completed in 2 hours. Passing requires a score of 60%, with a negative marking of 25% (0.25 marks deducted per incorrect answer). The registration fee is Rs. 2,596 and the certification is valid for 5 years. This 100-question practice bank provides comprehensive coverage of all syllabus chapters including candlestick charts, patterns, oscillators, Dow/Elliott wave theories, and risk management with detailed explanations.

Sample NCFM Technical Analysis Practice Questions

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

1Which of the following is a primary assumption of technical analysis?

A.Market action discounts everything

B.Stock prices move in random walks

C.Intrinsic value is the only driver of price

D.Markets are perfectly efficient and unpredictable

Explanation: Technical analysis is built on the assumption that all market information, fundamental factors, and psychological elements are already reflected (discounted) in the price action. Therefore, analyzing price movements is sufficient.

2How does technical analysis primarily differ from fundamental analysis?

A.Technical analysis studies financial statements, whereas fundamental analysis studies price patterns

B.Technical analysis focuses on price and volume data, while fundamental analysis evaluates intrinsic value through financial statements

C.Technical analysis is only used for long-term investments, whereas fundamental analysis is for short-term trading

D.Technical analysis ignores market supply and demand, while fundamental analysis focuses solely on it

Explanation: Technical analysis evaluates historical price and volume data to identify trends and patterns, whereas fundamental analysis examines economic factors, financial statements, and management quality to determine a stock's intrinsic value.

3Which of the following describes the technical analysis assumption regarding price trends?

A.Prices move randomly without any discernible direction

B.Prices move in trends that tend to persist until a reversal is confirmed

C.Prices only trend upward over long periods

D.Prices trend based solely on earnings announcements

Explanation: One of the core premises of technical analysis is that prices move in trends, and a trend in motion is more likely to continue than to reverse until clear counter-signals appear.

4The premise that 'history repeats itself' in technical analysis is primarily attributed to:

A.Corporate regulatory changes

B.Human psychology and market participants' reactions

C.Consistent monetary policy shifts

D.Predictable corporate earnings cycles

Explanation: Technical chart patterns occur because market participants share similar psychological traits (fear, greed, herd behavior) that lead to repetitive actions over time, which are reflected in price structures.

5What is a major limitation of technical analysis?

A.It requires access to internal company databases

B.It cannot be applied to highly liquid markets

C.It can produce false breakout signals in range-bound markets

D.It is only applicable to equity markets and cannot be used for commodities

Explanation: In range-bound or sideways markets, technical indicators and breakout strategies often produce false signals (whipsaws), leading to losses if not combined with proper risk controls.

6Which type of chart displays the open, high, low, and close prices for a specific period using a vertical line and horizontal tics?

A.Line chart

B.Bar chart

C.Point and figure chart

D.Kagi chart

Explanation: A bar chart represents each period's trading activity with a vertical line spanning from the low to high price, with a left horizontal tic indicating the opening price and a right tic indicating the closing price.

7What is the primary advantage of using a line chart compared to a candlestick chart?

A.It shows the intraday volatility and price range

B.It filters out intraday noise by focusing solely on closing prices

C.It displays the volume of transactions directly on the price line

D.It indicates the exact opening and closing relationship of each session

Explanation: Line charts connect closing prices over time, which helps traders filter out intraday volatility (noise) and see the clean, long-term trend of the security.

8A point and figure chart is unique because it:

A.Focuses only on time-based moving averages

B.Disregards the passage of time and volume, focusing solely on price movements of a certain magnitude

C.Uses volume bars to color the price columns

D.Only plots closing prices at pre-specified calendar intervals

Explanation: Point and figure charts plot price changes in columns of X's (price rises) and O's (price falls) based on a minimum price movement (box size) and reversal amount, ignoring time and volume.

9Under the Dow Theory, which of the following is true regarding volume?

A.Volume must decrease in the direction of the primary trend

B.Volume must confirm the trend by increasing in the direction of the primary trend and decreasing on pullbacks

C.Volume is irrelevant to trend analysis and should be ignored

D.Volume only matters during primary bear markets

Explanation: Dow Theory asserts that volume must confirm the trend: in a bull market, volume should increase as prices rise and contract as prices fall. In a bear market, volume should increase as prices drop.

10Which of the following best describes a 'secondary trend' in Dow Theory?

A.A trend lasting less than six days that represents market noise

B.A correction to the primary trend, typically lasting from three weeks to several months

C.The main direction of the market lasting from one to several years

D.A specialized trend that only occurs in industrial stocks

Explanation: A secondary trend represents important corrections to the primary trend, generally lasting between three weeks and three months, and retracing one-third to two-thirds of the primary move.

About the NCFM Technical Analysis Exam

The NCFM Technical Analysis Module is an intermediate-level certification offered by NSE Academy. It is designed to equip candidates with a practical and comprehensive understanding of price and volume analysis, chart reading, technical indicators, classical patterns, and risk management techniques. The syllabus covers the philosophy of technical analysis, construction and interpretation of candlestick patterns, support/resistance, trendlines, major technical indicators and oscillators (SMA, EMA, RSI, MACD, Stochastics, Bollinger Bands, ADX), market theories (Dow Theory and Elliott Wave), trading strategies (breakout, range, pullback), and critical trading psychology/position sizing rules. The certification is widely recognized in the Indian financial markets for careers in equity research, technical advisory, and professional trading. The exam has 60 questions to be solved in 2 hours, requires a 60% score to pass, imposes 25% negative marking, and the certificate is valid for 5 years.

Assessment

The exam consists of 60 multiple-choice questions (MCQs) to be completed in 120 minutes, covering the philosophy of technical analysis, candlestick patterns, support and resistance, indicators, oscillators, Dow and Elliott Wave theories, and risk management.

Time Limit

2 hours (120 minutes)

Passing Score

60% (equivalent to 60 out of 100 marks). There is a negative marking of 25% (0.25 marks deducted per wrong answer).

Exam Fee

Rs. 2,596 (inclusive of GST) (NSE Academy / National Stock Exchange of India)

NCFM Technical Analysis Exam Content Outline

12%

Introduction to Technical Analysis

Philosophy of technical analysis, fundamental vs. technical analysis, three basic assumptions, trend definition, and line/bar/point-and-figure charts.

13%

Candle Charts

Understanding candlestick construction, single candle patterns (Doji, Hammer, Hanging Man, Shooting Star, Marubozu), and multi-candle patterns (Engulfing, Harami, Morning/Evening Star).

20%

Pattern Study

Support and resistance, trendlines, channels, classical reversal patterns (Head and Shoulders, Double Top/Bottom), continuation patterns (Triangles, Flags, Pennants, Wedges), and gap analysis.

20%

Major Indicators & Oscillators

Moving averages (SMA, EMA), Relative Strength Index (RSI), MACD, Stochastic Oscillator, Bollinger Bands, and Average Directional Index (ADX).

12%

Trading Strategies

Breakout trading, trend-following strategies, range-bound trading, mean reversion, pullbacks, and multi-timeframe analysis.

12%

Dow Theory and Elliott Wave Theory

Dow Theory principles (primary, secondary, minor trends; volume confirmation; confirmation of averages) and Elliott Wave cycle structure (rules, impulse and corrective waves).

11%

Trading Psychology and Risk Management

Risk-reward ratios, stop-loss orders, position sizing (2% risk rule), cognitive biases (loss aversion, FOMO, revenge trading), and trading plans.

How to Pass the NCFM Technical Analysis Exam

What You Need to Know

Passing score: 60% (equivalent to 60 out of 100 marks). There is a negative marking of 25% (0.25 marks deducted per wrong answer).
Assessment: The exam consists of 60 multiple-choice questions (MCQs) to be completed in 120 minutes, covering the philosophy of technical analysis, candlestick patterns, support and resistance, indicators, oscillators, Dow and Elliott Wave theories, and risk management.
Time limit: 2 hours (120 minutes)
Exam fee: Rs. 2,596 (inclusive of GST)

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

NCFM Technical Analysis Study Tips from Top Performers

1Focus on the high-weight chapters: Pattern Study (20%) and Major Indicators & Oscillators (20%) together account for 40% of the total marks.

2Understand the difference between SMA and EMA, and practice identifying overbought/oversold levels on RSI and Stochastic oscillators.

3Memorize the three cardinal rules of Elliott Wave Theory, particularly regarding Wave 2 and Wave 3.

4Practice calculating position sizing using the 2% risk rule; several questions may test this math.

5Be careful of negative marking (0.25 marks per wrong answer). Avoid wild guesses and skip a question if you have no way to eliminate incorrect options.

6Simulate exam conditions by attempting timed mock tests to improve your speed in completing 60 questions within the 120-minute limit.

Frequently Asked Questions

How many questions are on the NCFM Technical Analysis Module exam and how long is it?

The exam consists of 60 multiple-choice questions to be completed in 2 hours (120 minutes).

What is the passing score for the NCFM Technical Analysis Module?

The passing score is 60%. There is a negative marking of 25% of the marks assigned to a question (0.25 marks deducted) for each incorrect answer.

What is the fee and validity of the NCFM Technical Analysis Module certification?

The exam fee is Rs. 2,596 (inclusive of GST). The certificate is valid for 5 years from the test date.

Does the NCFM Technical Analysis exam have negative marking?

Yes, there is a negative marking of 25% of the marks assigned to a question. For every incorrect answer, 0.25 marks will be deducted.

Who should take the NCFM Technical Analysis Module certification?

This module is ideal for stock market traders, financial advisors, equity researchers, students, and anyone looking to specialize in chart reading and technical trading strategies.

Are these official NCFM practice questions?

No, these are original practice questions created by OpenExamPrep to help you prepare. NSE Academy provides its own study material and model test papers separately.