Anybody thinking about CMT certification??

CFA Level III
#21

Flinthead, it’s all about forming your mosaic. This is just another piece to the puzzle. It’s great to have a belief of where something might be headed. It’s another skill to know when to enter and how to enter and how to actually manage the risk (quantify it–and not using VaR) of your position.

Off the shelf technicals may be “a joke”, but when you have a “cluster of evidence” of multiple technical tests, it surely makes you feel much more confident entering the market than purely on lagged economic data and geopolitical rumors. Technicals is more than just “chart reading”. It involves quant analysis and heavy stats.

I think if you actually gave it some time, you’d see that some brilliant minds of mathematicians and physicists have come up with some spectacular methods.

#22

I’m curious as to what you mean by “technicals take over”. That sounds more like a really bad made-for-TV movie rather than a carefully thought-out empirical study.

Emotions take over. Euphoria takes over. Market fever takes over. Stupidity takes over. But “technicals”?

Did “technicals take over” the tulip bulbs? Was it “technicals” that drove the Beanie Baby fad? Did “technicals” make Tickle Me Elmo worth $10,000?

Peter Steele (RIP) once said, “Don’t mistake lack of talent for genius.” If I may borrow from him, “Don’t mistake the greater fool theory for ‘technicals’.”

#23

Greenman,

I worked for a firm with $4b aum during the 2009 downturn. In every research meeting the conversation focused largely on where long term support was. Not what next quarter eps was. So you can live on your bubble all you want and pretend that real traders and PMs never look at technicals. But I just won’t ever invest with you if you manager assets by ignoring an element. I am not saying technicals are the be all end all but anyone who chooses to ignore a recognized element of markets is the greater fool. There is a reason why it is taught in level 1.

#24

Lol we’re all very impressed with your pseudo experience. But empiracle evidence >you

and those of us actually managing assets in the fund world really appreciate your anecdotal observation

#25

Yep, I totally agree with this. Im just shitting on typical chart reading technical derps.

i definitely agree with your mosaic point, as well as true statistically significant models.

#26

As best I can remember, I spent about five minutes on it at Level 1. About the only thing I can remember is that CFAI did not look favorably on technical analysis, because the empircal evidence was overwhelmingly against it.

Also–just because you worked for a firm that focuses primarily on technical analysis does not mean that it is the only way to manage assets. It doesn’t mean it’s the best way. It doesn’t even mean that it’s a good way.

I know a guy who has a $50b portfolio who says about charts, “I quit following them when I realized you could turn them upside down and get the same answer.”

#27

Lol. Being an assistant pm at a small mm firm = U manage nothing. You’re a joke.

#28

I can assure you with certainty that Wallstreet traders from all major banks and a large amounts of HF as well as some of the top HF managers (Top 30 HF earners) use them. They see the merit in looking at technicals. Just like fundamentals, technicals can be interpreted poorly and offer bad advice or they can be used to provide added value to an investment process. Technicals are an investment tool to be used not a means to an end.

#29

^exactly. It is all part of a mosaic and the largest managers in the world dont entirely ignore technicals. No one here, including me, believes technials are the be all end all as many pure TA followers do. I’d be out of a job if fundamentals didnt matter which is why I preach them when I can.

In any event for personal reasons I’ve decides to not pursue CMT. I think if I want to learn more I can read a few of the books from the reading list and round out my knowledge. But I’m going to spend the time picking up a new industry to cover. All the best and no hard feelings.

#30

Hi, I’m currently doing the CMT designation and yes - I would say it is worth doing!

First of all, I will advise you that anyone leaving comments on the CMT designation tend to leave negative remarks, stating it is a silly designation etc. However, one thing I have noticed is that the people leaving such comments are people who do not hold the CMT designation nor have a sound understanding of Technical Analaysis. They are probably people who have quickly read a book or two on the subject, incorrectly applied it’s techniques and quickly lost a lot of money and instead of blaming themself’s, blame Technical Analysis.

Secondly, Technical Analysis is an area that is growing rapidly! You will also notice that a growing number of fund managers, stock brokers, traders etc are all carrying the CMT letters (in addition to other designations). There have also been numerous studies by some very high profile institutions (including the Federal Reserve) that have clearly shown Technical Analysis is beating the weak form of the EMH and challenging the medium form. Furthermore, for those who do not want to use Technical Analysis they better at least be aware of it because the other guy will be using it against them - whether the other guy is using FA + TA, or just TA on it’s own.

Lastly, the CMT is not an easy desination to obtain - the depth of knowledge goes a lot deeper than knowing how the technical indicators work! A LOT DEEPER! You will learn things you have never heard of / knew were regarded as Technical Analysis.

As stated, I’m currently doing the CMT however, I’m also doing the CFA which is the designation that carries more prestege and is the one that will get you a job. In my opinion the CMT is valuble, very valuble, however it should be a compliment to another higher regarded designation such as the CFA, FMR etc.

In addition to the CMT you may also want to consider the CFT (Certified Financial Technicial) offre by the International Federation of Technical Analysts (IFTA). The CFT study material / exams are 99.9% identical to the CMT (the difference being 1 chapter in 1 book) therefore I’m doing both the CMT and CFT at the same time because if your studying for one you are also inadvertantly studying for the other! Furthermore, the CFT allows you to submit a dissertation at the end and obtain a Masters in Technical Analysis.

I hope this helps!

Ross, BA, DipMA, MSc - currently doing the CFA, CMT, CFT

#31

CMT

#32

Hey Ross v helpful. Looking at CMT vs CFT: what’s your take in terms of different (if any) body of knowledge, type of society/network and international recognition? Thank you

#33

I was wondering that did you read the whole book of Kirkpatrick and Dahlquist from cover to cover? Its a 700 pages book. What do you recommend, should I focus more on the study guide (I saw that there is one study guide for the same book) than the actual book? Should I let go reading other materials mentioned in the official list?

#34

Read the whole thing. Don’t cheat. The test is easy but the material is very interesting and worth reading all of it. This isn’t CFA text, it’s actual trading info. Pretty cool stuff.

#35

700 pages compared to teh CFAI 4000 pages? childs play…