What the CFA (Chartered Financial Analyst) is to fundamental analysis the CMT (Chartered Market Technician) has become to technical analysis. With the advent of retail traders impacting volatility in the market, funds and professional investors are looking more toward the merits of technical analysis. The CMT designation will demonstrate to potential clients and employers that you know your stuff.
The top 5 reasons why you should get the CMT designation are the following; industry knowledge, considerably higher starting pay, regulatory recognition, expanding professional network, and a better work life balance.
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Without wasting any time, let’s jump right into the top 5 reasons you should get the CMT designation.
What Is The CMT?
The Chartered Market Technician designation is for those who are interested in how market behavior can impact the value of a stock. A CMT spends hours studying history & theory, markets, market indicators, chart construction, trend analysis, chart analysis, market cycles, and statistical analysis.
The CMT designation is a coveted designation and for many people is one of the best ways to start a career in the professional investment industry. Having it separates retail traders from professional ones and will give you all the tools you need to succeed in the stock market.
The CMT designation mimics the CFA designation in scope and timeline. There are three different tests that you need to take to receive the designation. The first goes over the fundamentals of technical analysis and introduces students to the world of chart patterns. The second test begins to introduce students to the modern world of algorithmic trading and risk management. Finally, the third test sees students growing into asset management and teaches the cutting edge material such as behavioral finance.
Currently the entire process takes around three years to complete from start to finish. Prospective candidates need to assess if they can dedicate the time and energy towards pursuing the CMT designation. If you can stick it out however it is more than worth it.
Reason 1: Industry Knowledge
Plain and simple, you are on the leading edge of technical analysis. With the CMT designation you are the elephant in the room when sitting with clients, employers, and portfolio managers.
Over the past 30 years the investing world has completely changed. Now algorithms and retail investor’s drive implied volatility. You are the master of predicting how both of these emergent forces impact a stock’s momentum. With the CMT designation you can efficiently position investments to profit immensely.
With the CMT designation you will know theory, computer programing, macro economic cycles, charts and patterns, behavioral investing, and volatility and risk management. There simply is no better place in the world to learn these skills.
If you are interested in how markets work, how stocks are priced, and the overall theory behind everything you need to look into the CMT designation.
Reason 2: Considerably Higher Starting Pay
People work for money, CMT’s are no different. What is different however is just how much money you will make with the designation.
Without the CMT designation you are looking at making in the range of $65,000 to $95,000 U.S before taxes. That is a pretty good salary for a lot of people, however that number is nothing compared to those holding the designation. (Zippa.com Survey for Source for starting salary)
In 2018 the CMT association conducted a survey on average salary for a CMT designation holder. The average salary for CMT’s in 2018 was $200,000! That is over double the average pay for those without the charter. (Source of CMT salary)
If you want to start making real money in the investment industry you need to have certifications and designations. The CMT will get you those huge salary increases that you have always dreamed of. However it’s not an easy task to get the designation, but it is worth it for the salary alone.
Reason 3: Regulatory Recognition
The CMT would be worth nothing if the investment industry failed to recognize it. Fortunately for CMT designation holders it’s the opposite. The CMT is fully recognized by regulatory committees.
On February 8th, 2005 the CMT association was notified that FINRA officially accepted the CMT level 1 and 2 as an alternative to the series 86 exam. This is huge, as it means that prospective financial analysts can get two designations at the same time just by taking the CMT 1 and 2 tests. (Source)
For prospective financial analysts in Canada the IIROC has deemed that the CMT program also meets their credentials for industry continuing education programs. Just like U.S residents, now Canadian residents can kill two birds with one stone by taking the CMT. (Source)
In 2017 the Nebraska Department of Banking and Finance approved the CMT to be advertised to prospective clients as a certified designation. This is huge as Omaha, Nebraska is considered as a major finance hub within the industry. This only further increases regulatory approval rates. (Source)
Every year the CMT designation becomes more and more widely recognized by the investment world. There is no better time than now to start your process of obtaining the designation. At this rate in one decade the CMT will be one of the most sought after designations.
Reason 4: Expanding Professional Network
In the world of professional investing returns/risk is king and networking is queen. Simply put, networking is what will open opportunities for both you and your fund. It’s what advances your career faster than anything else.
When you obtain the CFA designation an entire world of professional networks will open up to you. You can join and network with several local chapters across North America, South America, Europe, Asia, and Australia.
There are several charters alone in North America. Chances are that if you are near a major investing hub there is a local charter for you. These charters are how you network and get those coveted jobs where you can really make some real cash.
Networking is the secret weapon for the investing industry. I recommend that anyone who is interested in the industry enroll and attend one of these chapter meetings. The local chapters alone are worth the CMT designation.
Reason 5: Better Work Life Balance
The professional investing industry is notoriously bad when it comes to balancing your professional and personal life. Often you will see analysts and portfolio managers pulling 80-90 hour work weeks back to back.
This is not because they are workaholics so much as it is that the industry inherently demands those hours. That’s because investments don’t stop moving after market hours, you need to constantly be up to date on what’s going on.
If you don’t have the designation you will be the lowest guy on the totem pole. That means no holidays, showering at the office, sometimes sleeping there too. The industry as a whole has gotten so bad with globalism impacting investments that Goldman recently had an intern die after a 72 hour straight shift. (Source)
Those hours don’t stop until you’re well into a career and can finally go down to a normal 40 hour work week. This is because around the VP level in investment banks and Senior analysts in hedge funds you will have a team under you to help manage the hours.
If you have the CMT designation you are going to come in far above a normal entry level person. In fact CMT holders advance very quickly in their career and end up taking on senior leadership roles within their respective funds and banks. (Source)
Because of this I highly advise prospective fund employees to look into the CMT designation. It separates you and tells your potential employer that you “know your stuff.”
There you have it, the top 5 reasons you should get the CMT designation. It’s a long but extremely rewarding journey. You will make friends and a whole world of opportunities will open up to you just by pursuing the CMT designation alone. When you finally climb the mountain and have successfully obtained the designation you will look back and be thankful for all the hard work.
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Until next time, I wish you the best of luck in your investing journey.