Kirkpatrick and Dahlquist CMT1 Chapter 5

by Steve Kern on June 5, 2015

in CMT Level 1

Part II: Markets and Market Indicators

Chapter 5: An Overview of Markets

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Chapter Objectives
- The market characteristics required for investors to use technical analysis
- The types of markets in which technical analysis can be used
- The differences between informed, uninformed, and liquidity market players
- The differences among:
  - price-weighted
  - market capitalization weighted, and
  - equally weighted averages
In What Types of Markets Can Technical Analysis Be Used?
Types of Contracts
- Cash Market
- Derivative Markets
  - Futures Markets
  - Options Markets
  - Swaps and Forwards
How Does a Market Work?
Who Are the Market Players?
- Noise
- Liquidity players
How Is the Market Measured?
- Price-Weighted Average
- Market Capitalization Weighted Average
- Equally Weighted (or Geometric) Average
Conclusion
Review Questions