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Know Sure Thing (KST)

Know Sure Thing (KST)
TradingTechnical AnalysisTechnical Analysis Basic Education

What Is the Know Sure Thing (KST)?

The Know Sure Thing (KST) is a momentum oscillator developed by Martin Pring to make rate-of-change readings more straightforward for traders to decipher.

Ascertaining the Know Sure Thing (KST)

The KST is calculated by taking the simple moving average (SMA) of four unique rate-of-change (ROC) periods, adding them together to think of the KST, and making a signal line by taking the 9-period SMA of the KST.

The KST is calculated with the accompanying equation:
KST=(RCMA #1×1)+(RCMA #2×2) +KST=(RCMA #3×3)+(RCMA #4×4)where:RCMA #1=10-period SMA of 10-period ROCRCMA #2=10-period SMA of 15-period ROCRCMA #3=10-period SMA of 20-period ROCRCMA #4=15-period SMA of 30-period ROC\begin &\text = ( \text{RCMA #1} \times 1 ) + ( \text{RCMA #2} \times 2 ) \ + \ &\phantom { \text = } (\text{RCMA #3} \times 3 ) + ( \text{RCMA #4} \times 4) \ &\textbf \ &\text{RCMA #1} = \text{10-period SMA of 10-period ROC} \ &\text{RCMA #2} = \text{10-period SMA of 15-period ROC} \ &\text{RCMA #3} = \text{10-period SMA of 20-period ROC} \ &\text{RCMA #4} = \text{15-period SMA of 30-period ROC} \ \end
At long last, the signal line is calculated by taking the 9-period SMA of the KST value.

Figuring out the Know Sure Thing (KST)

The KST indicator can be utilized in similar way as numerous other momentum oscillators, for example, the notable relative strength index (RSI). Trading signals are generated when the KST gets over the signal line, yet traders may likewise search for convergence and divergence with the price, overbought or oversold conditions, or crossovers of the center line.

Numerous traders consolidate the KST indicator with different forms of technical analysis to expand their chances of progress. For instance, traders might take a gander at other non-momentum indicators, chart designs, or candlestick examples to help in their decision-production.

In a 1992 Stocks and Commodities article, Pring alluded to the indicator as "Added Rate of Change (KST)," however the KST term stayed with technical analysts.

Illustration of the Know Sure Thing (KST)

We should investigate a model chart:

In the model over, the KST indicator came to profoundly overbought conditions toward the beginning of February and at last encountered a crossover, which generated a very much coordinated sell signal. The indicator likewise crossed over in late February, mid-March, and mid-April with limited achievement, yet the key is searching for both overbought or oversold conditions, as well as a crossover to signal the trade.

Traders might have likewise taken a gander at different forms of technical analysis to boost their chances of an effective trade. For instance, traders taking a gander at the above chart might have considered the critical bearish volume on the day that the signal happened or the candlestick designs leading up to the trading signal while settling on their choice. These experiences could likewise be utilized to try not to make less productive trades suggested by the KST indicator.

Features

  • The Know Sure Thing (KST) is a momentum oscillator planned to decipher rate-of-change price data.
  • Trading signals are generated when the KST gets over the signal line, yet traders likewise search for overbought or oversold conditions.
  • Traders likewise consolidate the KST with other technical analysis to expand their chances of a fruitful trade.