Chartered Market Technician (CMT) Exam 2025 – 400 Free Practice Questions to Pass the Exam

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The TRIN index is calculated by which of the following methods?

Dividing total volume by number of trades

Dividing the advance/decline ratio by the ratio of advancing volume to declining volume

The TRIN index, also known as the Arms Index, measures the market's breadth by analyzing the relationship between advancing and declining issues and their corresponding volume. Specifically, it is calculated by dividing the advance/decline ratio by the ratio of advancing volume to declining volume.

This method provides insight into whether the market is favoring advances or declines and is particularly useful in assessing market sentiment. A TRIN value of less than 1 typically indicates a bullish sentiment because more volume is moving into advancing stocks compared to declining ones, while a TRIN value greater than 1 suggests bearish sentiment, where more volume is in declining stocks.

The other methods presented do not accurately reflect the calculation of the TRIN index, as they measure different relationships or parameters that do not pertain to the specific focus of the TRIN index on advances, declines, and volume associated with them.

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Dividing the number of market participants by total price movement

Subtracting declining volume from advancing volume

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