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CMT Program · Last updated October 2026

CMT Level III Exam (Chartered Market Technician): free practice test

The capstone CMT exam, "The Work of a Technical Analyst". Groups of linked items combine two or more knowledge domains: you build an analysis, justify it in writing and manage the position's risk. Pass Level II first. Exams run in June and December.

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About the CMT Level III exam

The capstone CMT exam, "The Work of a Technical Analyst". Groups of linked items combine two or more knowledge domains: you build an analysis, justify it in writing and manage the position's risk. Pass Level II first. Exams run in June and December.

What's on the exam

CMT Level III
Risk Management and Position Sizing
6 key facts
Asset Relationships and Intermarket Analysis
6 key facts
Portfolio Management and Strategy
6 key facts
Behavioral Finance in Practice
6 key facts
Classical Methods and Integrated Analysis
6 key facts
Ethics and Professional Standards
6 key facts

Each branch is a topic in the official outline. Members see every key fact on the full mind map. Read the free study guide →

How to pass the CMT Level III exam

  • Most items are short written answers: make a list, state and justify your analysis, or show a calculation. Practise writing answers in a few clear lines.
  • Each group weaves domains together, for example a chart reading plus a position-sizing calculation plus an ethics point. Read the whole group before answering.
  • Answer exactly what's asked. If a question asks for two reasons, give two; extra points don't earn extra marks.
  • Our practice questions are multiple choice on the same reasoning. After each one, explain the answer to yourself in one or two sentences, as you would on the exam.

Save your results and get your Readiness Score

Create a free account after the test: your score by topic, a mistakes bank, the complete study notes for the first topic, flashcards and the Indicator Formula Sheet.

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What's in the premium CMT Level III prep

Premium CMT Level III prep is studied one topic at a time. Each step starts with that topic's key notes and flashcard deck, then its own question sets of 25, so you master one topic before you move to the next. When every topic is strong, the 6 full mock exams show you're ready.

3,000practice questions, every answer explained
6full-length mock exams, 50 questions each, timed
800flashcards with spaced repetition, sorted by topic
60comprehensive key notes across 6 topics

Your step-by-step study path

  1. 1
    Risk Management and Position Sizing10 key notes, 135 flashcards, then 500 practice questions in 20 sets of 25
    Notes free with an account
  2. 2
    Asset Relationships and Intermarket Analysis10 key notes, 135 flashcards, then 500 practice questions in 20 sets of 25
    Premium
  3. 3
    Portfolio Management and Strategy10 key notes, 135 flashcards, then 500 practice questions in 20 sets of 25
    Premium
  4. 4
    Behavioral Finance in Practice10 key notes, 135 flashcards, then 500 practice questions in 20 sets of 25
    Premium
  5. 5
    Classical Methods and Integrated Analysis10 key notes, 130 flashcards, then 500 practice questions in 20 sets of 25
    Premium
  6. 6
    Ethics and Professional Standards10 key notes, 130 flashcards, then 500 practice questions in 20 sets of 25
    Premium
  7. Final step: 6 full mock exams50 questions each, timed like test day. Pass them, then book your exam.
    Premium
Free with an account

Read the complete CMT Level III study notes for “Risk Management and Position Sizing”

Our first full set of comprehensive notes, about 14 minutes of reading: Sizing by risk, not by dollars · The drawdown math · Choosing the stop and the order type · Thinking at the portfolio level · Writing the answer, a worked exam example, the traps examiners use and a one-minute recap. Create a free account to read it and see how premium notes work before you decide.

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Study tools included

3,000 practice questions

3,000 exam-style questions per exam, organized topic by topic in sets of 25. Every answer explained, with the rule it comes from.

6 full mock exams

6 full-length timed mock exams per exam, with real question counts and time limits, so test day feels like practice day.

Exam Readiness Score

One 0 to 100 number that tells you when you're ready to book. Reach 80 and you're covered by our Pass Guarantee.

800 flashcards + spaced repetition

800 flashcards per exam, in a deck for each topic, that come back right before you'd forget them. Five minutes a day keeps every number fresh.

60 comprehensive key notes

60 key notes per exam, split across its topics and each explained in full: the concepts, worked exam examples, the traps examiners use and a quick recap. Your first set is free with an account.

Mind maps

See the whole exam on one screen: every topic and the facts under it.

Sample questions with answers

These are the questions in the free test above, with answers. Try the test first. You'll learn more by getting some wrong.

1. A portfolio manager wants each position's risk to be equal regardless of volatility. Which sizing method fits best?
Answer: Sizing each position so that its ATR-based stop risks the same percentage of equity. Volatility-adjusted sizing (for example using ATR to set the stop) equalizes the money at risk per trade, so a volatile stock gets a smaller position.
2. A strategy has a maximum drawdown of 30%. How much must it then gain to get back to its previous peak?
Answer: About 43%. After a 30% loss, 70 must grow back to 100: 100 / 70 − 1 = 42.9%. Losses need larger percentage gains to recover.
3. Which order type limits a loss but may fill well below its trigger price in a fast market gap?
Answer: Stop-loss (stop market) order. A stop market order becomes a market order when triggered, so after a gap it fills at the next available price. A stop-limit avoids that but may not fill at all.
4. A rising US dollar is traditionally associated with which effect on commodity prices?
Answer: Commodities tend to fall, as most are priced in dollars. Most commodities are priced in US dollars, so a stronger dollar tends to pressure their prices. It's a tendency, not a rule.
5. In a sector rotation model, which sectors traditionally lead in the early stage of an economic recovery?
Answer: Financials and consumer discretionary. Early-cycle leadership usually comes from rate-sensitive and cyclical sectors such as financials and consumer discretionary. Defensives lead late in the cycle and in downturns.
6. An analyst uses a 200-day moving average filter: hold equities when the index is above it and cash when below. The main benefit of this rule is usually:
Answer: Lower drawdowns in long bear markets, at the cost of whipsaws. Trend filters cut exposure in prolonged declines, which reduces drawdowns. In sideways markets they whipsaw, so they lag buy-and-hold in some years.
7. A relative strength (momentum) strategy ranks sectors by 6-month performance and holds the top three. What is the key risk?
Answer: Sharp momentum reversals at turning points. Momentum strategies do well in persistent trends but can suffer when leadership reverses abruptly, for example at bear-market bottoms.
8. When a technical analyst writes an investment recommendation for a client, what should come before the trade idea?
Answer: The client's objectives, constraints and risk tolerance. A recommendation must fit the client. Objectives, time horizon, constraints and risk tolerance frame which trades are suitable.
9. A trader refuses to close a losing position and adds to it to lower the average cost. Which bias is most likely at work?
Answer: Loss aversion and the sunk-cost effect. Averaging down on a loser to avoid realizing the loss reflects loss aversion and attachment to money already spent.
10. Extreme bullish readings in advisor sentiment surveys at a market peak are best explained by:
Answer: Herding and over-extrapolation of recent gains. Crowds extrapolate recent trends and follow each other. That's why sentiment extremes are used as contrarian indicators.
11. A stock completes a head-and-shoulders top, but the weekly trend is still up and breadth is strong. A sound integrated conclusion is:
Answer: Treat it as a warning: tighten stops or reduce size, and wait for confirmation on the higher time frame. Integrated analysis weighs evidence across time frames. A daily reversal pattern against a strong weekly trend argues for risk reduction, not a full reversal of position.
12. On a point-and-figure chart with a 3-box reversal, a column of Xs that rises above the top of the previous X column is called a:
Answer: Double-top buy signal. When an X column exceeds the prior X column's high, it's a double-top breakout, the simplest P&F buy signal.
13. Weekly and daily charts give conflicting signals. Which approach do most technicians recommend?
Answer: Trade in the direction of the longer time frame and use the shorter one for timing. The multiple time-frame approach takes direction from the longer trend and entry timing from the shorter one.
14. A member is asked to present another firm's chart analysis to clients as their own work. Under the CMT Code of Ethics this would be:
Answer: A violation: members must not misrepresent others' work as their own. Plagiarism breaches the standards of professional conduct. Credit the source or don't use it.
15. A member trades a stock personally ahead of publishing a strong buy recommendation on it. This is best described as:
Answer: Front-running clients, a conflict of interest the standards prohibit. Clients' interests come first. Trading ahead of your own published recommendation puts personal gain before clients.

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Certification guide

How to become a Chartered Market Technician (CMT): The CMT charter is the main professional credential in technical analysis. You earn it by passing three exams run by the [CMT Association](https://cmtassociation.org/cmt-program), then joining the Association and meeting its work-experience requirement. Most candidates take 18 months to 3 years. Here is the path, what it costs and how long to study.

CMT Level III exam FAQ

How many questions are on the CMT Level III exam?

Grouped items (3 to 7 per group): some multiple choice, most short written answers, with a time limit of 4 hours. Format: closed book, computer-based.

What is the passing score for CMT Level III?

Not published. The CMT Association sets the passing standard; practise to 70% or higher.

How much does the CMT Level III exam cost?

About US$875 to US$1,475 by registration window (2026). Fees change by registration window, so confirm on the CMT Association website before you register.

Which languages is the CMT Level III exam offered in?

English.

Where do I take the CMT Level III exam?

Prometric (test center or ProProctor remote proctoring).

Is this CMT Level III practice test free?

Yes. The 15-question practice test on this page is free, with an explanation for every answer and no signup. A free account also unlocks the complete study notes for the first topic. The full CMT Level III prep is Premium at $147 a month for this exam.

What's in the premium CMT Level III prep?

3,000 practice questions organized topic by topic (Risk Management and Position Sizing: 500; Asset Relationships and Intermarket Analysis: 500; Portfolio Management and Strategy: 500; Behavioral Finance in Practice: 500; Classical Methods and Integrated Analysis: 500; Ethics and Professional Standards: 500), 6 full-length timed mock exams of 50 questions, 800 flashcards and 60 comprehensive key notes split across all 6 topics, plus a mistakes bank and the Readiness Score.

Compare CMT Level III with the other CMT levels

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Exam details are summarized from the official candidate information available in October 2026. the CMT Association changes formats and fees, so confirm with CMT Association before you book. CMTQuizBank is not affiliated with the CMT Association or Prometric.

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