CMT Level I 2021: An Introduction to Technical Analysis (Paperback)

Introduction ix

The CMT Association ix

The CMT Program x

The Level I Textbook xii

Section I Theory and History of Technical Analysis 1

Chapter 1 The Basic Principle of Technical Analysis—The Trend 3
Charles D. Kirkpatrick II and Julie R. Dahlquist

Chapter 2 Dow Theory 15
Charles D. Kirkpatrick II and Julie R. Dahlquist

Chapter 3 Introduction to Charts, Part 1 27
Julie Dahlquist, Ph.D., CMT

Chapter 4 Introduction to Charts, Part 2 36
Julie Dahlquist, Ph.D., CMT

Section II Charts, Trends, and Patterns 47

Chapter 5 Trends—The Basics 49
Charles D. Kirkpatrick II and Julie R. Dahlquist

Chapter 6 Breakouts, Stops, and Retracements 77
Charles D. Kirkpatrick II and Julie R. Dahlquist

Chapter 7 Moving Averages 99
Charles D. Kirkpatrick II and Julie R. Dahlquist

Chapter 8 Bar Chart Patterns 127
Charles D. Kirkpatrick II and Julie R. Dahlquist

Chapter 9 Short-Term Patterns 160
Charles D. Kirkpatrick II and Julie R. Dahlquist

Chapter 10 Introduction to Volume Analysis 202
Buff Dormeier, CMT

Chapter 11 Volume: The Technician’s Decryption Device 208
Buff Dormeier, CMT

Chapter 12 An Introduction to Volume Indicators 215
Buff Dormeier, CMT

Chapter 13 Confirmation 219
Charles D. Kirkpatrick II and Julie R. Dahlquist

Chapter 14 Candlestick Charting Essentials 256
Steve Nison

Chapter 15 Point-and-Figure Charting 266
Perry J. Kaufman

Section III Advanced Concepts In Charting and Trend Analysis 293

Chapter 16 Introduction to the Wave Principle 295
Wayne Gorman, Jeffrey Kennedy, and Robert R. Prechter, Jr.

Chapter 17 The Anatomy of Elliott Wave Trading 313
Wayne Gorman, Jeffrey Kennedy, and Robert R. Prechter, Jr.

Chapter 18 Measuring Market Strength 328
Charles D. Kirkpatrick II and Julie R. Dahlquist

Chapter 19 Foundations of Cycle Theory 361
Kyle Crystal, CMT, CFTe

Chapter 20 Basics of Cycle Analysis 371
Kyle Crystal, CMT, CFTe

Section IV Markets and Volatility 385

Chapter 21 Markets, Instruments, Data, and the Technical Analyst 387
Michael Kahn, CMT

Chapter 22 Equities 390
Michael Kahn, CMT

Chapter 23 Indexes 396
Michael Kahn, CMT

Chapter 24 Fixed Income/Bonds 405
Michael Kahn, CMT

Chapter 25 Futures 414
Michael Kahn, CMT

Chapter 26 Exchange-Traded Products (ETPs) 421
Michael Kahn, CMT

Chapter 27 Foreign Exchange (Currencies) 426
Michael Kahn, CMT

Chapter 28 Options 431
Michael Kahn, CMT

Chapter 29 Understanding Implied Volatility 438
Russell Rhoads

Chapter 30 About the VIX Index 450
Russell Rhoads

Section V Behavioral Finance and Other Theories of Market Dynamics 465

Chapter 31 What Is the Efficient Market Hypothesis? 467
Edwin T. Burton and Sunit N. Shah

Chapter 32 The Forerunners to Behavioral Finance 475
Edwin T. Burton and Sunit N. Shah

Chapter 33 Noise Traders and the Law of One Price 480
Edwin T. Burton and Sunit N. Shah

Chapter 34 Noise Traders as Technical Traders 488
Edwin T. Burton and Sunit N. Shah

Chapter 35 Academic Approaches to Technical Analysis 498
Andrew W. Lo and Jasmina Hasanhodzic

Chapter 36 Market Sentiment and Technical Analysis 513
Michael Carr, CMT, CFTe

Chapter 37 Sentiment Measures from Market Data 517
Michael Carr, CMT, CFTe

Chapter 38 Sentiment Measures from External Data 526
Michael Carr, CMT, CFTe

Section VI Basic Statistics For the Technical Analyst 535

Chapter 39 Introduction to Descriptive Statistics 537
Jonas Elmerraji, CMT

Chapter 40 Introduction to Probability 550
Jonas Elmerraji, CMT

Section VII Perspectives On Technical Trading Systems 559

Chapter 41 Objective Rules and Their Evaluation 561
David Aronson

Chapter 42 Being Right or Making Money 576
Ned Davis

Chapter 43 The Model-Building Process 606
Ned Davis

Chapter 44 Relative Strength as a Criterion for Investment Selection 621
Robert A. Levy

Index 637