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. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses ...
  2. Market Indicators

    A series of technical indicators used by traders to predict the ...
  3. Mass Index

    A form of technical analysis that looks at the range between ...
  4. Money Flow Index - MFI

    A momentum indicator that uses a stock’s price and volume to ...
  5. On-Balance Volume (OBV)

    A momentum indicator that uses volume flow to predict changes ...
  6. Negative Volume Index - NVI

    A technical indicator that relies on changes in a security’s ...
Related Articles
  1. Using Compound Indicators To Predict ...
    Trading Strategies

    Using Compound Indicators To Predict ...

  2. Using Trading Indicators Effectively
    Active Trading

    Using Trading Indicators Effectively

  3. Forex Market Sentiment Indicators
    Forex Education

    Forex Market Sentiment Indicators

  4. Trading Around Key Options Indicators
    Options & Futures

    Trading Around Key Options Indicators

Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  3. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  4. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  5. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  6. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
Trading Center