Does anyone have the CMT, started the program, or plan on starting the program? I searched previous threads on this topic but there really aren’t any recent ones, hoping to hear from people engaged in the program more recently. I felt it especially fitting to start this thread given that today’s market has compeltely thrown fundamentals out the window.
I used to think TA was complete BS but I’m starting to realize that everyone does it and if enough people are trading based on the same set of rules it becomes self fufilling.
Any comments or experience with the program is appreciated.
Hey man, I’m only responding because I feel you’re left hanging out there. The CFA’s training is not big on technical analysis. If you want to be a chartist, I’d say save yourself the trouble and headache of the CFA and start that route now – the two don’t overlap. I hear the pass rate is like 70%, so you should be able to power through that designation quickly.
I think you’re completely wrong about today’s market throwing fundamentals out of the window, but that’s a question for another day. I would recommend you ask around about the job prospects of a CMT. I went to Reddit and most there think the program is a cash grab, but YMMV. I do think where I work the CMT designation would not only be worthless to you, it’d actually be a negative. The investment community is divided between fundamentals and chartists and the latter is a much smaller tribe - think of these as warring factions. If you’re doing this for your own trading, though, have at it!
Here’s my observation of TA: It’s importance depends on your time frame. In the long run, fundamentals always find their way of being the bottom line when it comes to price of the underlying. However, in smaller time frames, what matters more than the truth is what the masses think the truth is or how they interpret it. Also, in the short run, how market participants are positioned can cause price inefficiencies that could best be understood though chart studies (case in point …the “short squeeze” or any other “trapped traders” situation) TA is basically reading the psychology of the patricipants in that market. In the short run, TA matters more than fundamentals. On the intraday level… it is all that matters.
When you two are done high-5ing I want to weigh in on the “self defeating” debate. In some aspects this is correct. Developers of technically driven algorithmic trading systems keep them secret… and for good reason. If everyone knew of a signal that had a 70% chance of being correct over time, they would all pile trying to get in on the signal before the others thereby eroding the edge. This could be true for many technical indicators as well. Signals such as RSI or moving average cross overs could be overused in the same way. My counter point to the validity of TA is that it is not all about signals to buy or sell. More importantly it is about context. How the market participant wants to interpret or use that context is at their discretion. (key word… *discretion*) The two most important areas of context would be trend and momentum. Neither of these say exactly when to take a position. They are an explanation of what is happening … not instructions on what to do about it. This cannot be eroded.
Market is trading at all time highs and earnings continue to decline. Today’s market has thrown fundamentals out. When I said today I meant literally like July 17th today not the market going forward. Fundamentals will always win out in the long term but timing your entry in a value play can be just as important as identifying the value.
I think the value of TA is increasing. I work for a long term value oriented instutional investor so I’m not gonig to be bringing any TA ideas to my CIO, but I do some discretionary trading for us and I do find it interesting. Was hoping to hear from some people involved in the program to hear if they learned anything of value, I’m not looking for the designation to boost my resume…although it never hurts to add another spoke to the wheel.
You are on the right track wanting to undestand charts better. I too think this CMT certification is a waste. In my experience, the best TA is very basic. You can learn for free (I can link some sources). When it becomes valuable is after *lots* of practice through application in live markets. You have to get your own feel for it. In addition, exotic setups like that “vomiting camel” are, in my opinion, a joke. The best analysis is simple and elegant with confirmation coming from many angles.
Completely agree, I have a small brokerage account that I have some screw around $ in to test the different strategies I’ve been able to learn on my own. Some days its dead on and some days it doesn’t happen the way it should according to the theories but it’s still interesting to say the least. If you place too much emphasis on TA strategies you’ll get absolutely run over on the days that the market doesn’t adhere, but there are those days where it works and therein lies my interest.
I could see TA possibly being useful when used in conjunction with FA. And by that I mean for identifying optimal entry/exit points once fundamental value has been determined. Using TA alone, you might as well hit the blackjack table.
I use very basic TA to help pick entry/exit points, but as KMD pointed out over the longer time scales fundamentals dominate. As I trade for a longer holding period the amounts I may be gaining/losing are for the most part immaterial to my p&l, but I still get irked if I fill and order and the price drops 2% later that day.
