Know Sure Thing (KST)

AAA

DEFINITION of 'Know Sure Thing (KST)'

A two-line indicator used determine momentum in stock trends. As an oscillator it fluctuates above and below zero, providing trade signals and analytical insight based on divergence with price and KST and signal Line crossovers. The indicator formula utilizes four different time frames to show overall momentum, and not just momentum over one specific timeframe:

ROCMA1 = 10-Period SMA of 10-Period Rate-of-Change 
ROCMA2 = 10-Period SMA of 15-Period Rate-of-Change 
ROCMA3 = 10-Period SMA of 20-Period Rate-of-Change 
ROCMA4 = 15-Period SMA of 30-Period Rate-of-Change 
 
KST Line = (RoCMA1 x 1) + (RoCMA2 x 2) + (RoCMA3 x 3) + (RoCMA4 x 4)  
 
Signal Line = 9-period SMA of KST
 
Where SMA stands for Simple Moving Average and ROC stands for Rate-of-Change.
 

INVESTOPEDIA EXPLAINS 'Know Sure Thing (KST)'

 
Know Sure Thing was developed by Martin Pring, a technical analyst and author, to show the overall momentum of a stock, or other financial asset. Traders typically use KST for trade signals or to confirm trends.
 
Buy signals occur when the KST crosses above the zero line, or when the KST crosses above its signal line. Sell signals occur when the KST crosses below the zero line, or when the KST crosses below the signal line. When the KST stays above zero during an uptrend, it confirms the trend. When KST stays below zero during a downtrend, it confirms the downtrend.
 
Traders also watch for when the indicator diverges with price. If the price is making new highs, but KST isn't, it indicates price momentum is slowing. If the price is making new lows and KST isn't, it indicates sell pressure is slowing.
 
While the formulas are different, the applications of KST are similar to that of the MACD.
RELATED TERMS
  1. Market Indicators

    A series of technical indicators used by traders to predict the ...
  2. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses ...
  3. Fintech

    Fintech is a portmanteau of financial technology that describes ...
  4. Indicator

    Indicators are statistics used to measure current conditions ...
  5. Intraday Momentum Index (IMI)

    A technical indicator that combines aspects of candlestick analysis ...
  6. Mass Index

    A form of technical analysis that looks at the range between ...
Related Articles
  1. Trading Strategies

    Using Compound Indicators To Predict Market Fluctuations

    Learn how to combine average true range, simple moving average and Bollinger band indicators to gauge market volatility.
  2. Active Trading

    Using Trading Indicators Effectively

    Select multiple indicators, avoid information overload and optimize indicators to effectively use technical analysis tools.
  3. Forex Education

    Forex Market Sentiment Indicators

    Sentiment Indicators are another tool that can alert traders to extreme conditions.
  4. Options & Futures

    Trading Around Key Options Indicators

    Learn the key economic indicators to help predict market movement.
  5. Fundamental Analysis

    Deadly Flaws In Major Market Indicators

    These indicators give investors and experts some data to work with, but they're far from perfect measures.
  6. Technical Indicators

    Using Technical Indicators To Develop Trading Strategies

    Unfortunately, there is no perfect investment strategy that will guarantee success, but you can find the indicators and strategies that will work best for your position.
  7. Forex Education

    4 Types Of Indicators FX Traders Must Know

    By learning a variety of indicators, you can determine the right time and the right strategy to trade any given currency pair.
  8. Fundamental Analysis

    4 Key Indicators That Move The Markets

    Find out what reports to watch in order to anticipate and react to market movements.
  9. Chart Advisor

    Consider Buying These Uptrending Stocks

    Recent pullbacks in these uptrending stocks present an opportunity to get long for another possible rally.
  10. Technical Indicators

    Use Volume And Emotion To Tackle Topping Patterns

    Selling short in a topping pattern offers an advantageous reward-to-risk profile, but it can be hard to find good entry prices.

You May Also Like

Hot Definitions
  1. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  2. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  3. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  4. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  5. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  6. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
Trading Center