Know Sure Thing (KST)

The Know Sure Thing (KST) is a momentum oscillator developed to simplify rate-of-change readings for traders. It smooths multiple rate-of-change (ROC) measures, weights them, and sums them into a single line. A 9-period simple moving average (SMA) of the KST serves as a signal line. Crosses between the KST and its signal line, centerline crossings, and divergence with price are used as trading signals.

Key takeaways

• KST is a summed, smoothed momentum oscillator based on multiple ROC periods.
• A buy/sell signal is commonly generated when the KST crosses its 9-period SMA signal line.
• KST can indicate overbought/oversold conditions and divergence with price.
• It is best used with other technical tools (trend filters, volume, chart patterns) and proper risk management.

Calculation

KST is composed of four smoothed ROC components (RCMAs), weighted 1–4 and summed:

KST = (RCMA#1 × 1) + (RCMA#2 × 2) + (RCMA#3 × 3) + (RCMA#4 × 4)

Where:
* RCMA#1 = 10‑period SMA of the 10‑period ROC
RCMA#2 = 10‑period SMA of the 15‑period ROC
RCMA#3 = 10‑period SMA of the 20‑period ROC
* RCMA#4 = 15‑period SMA of the 30‑period ROC

The signal line = 9‑period SMA of the KST.

(These are Martin Pring’s original/default settings; traders may adjust periods to suit different timeframes.)

Interpreting signals

Common ways traders use KST:
* Signal‑line cross:
* Bullish: KST crosses above its 9‑period SMA → potential buy.
* Bearish: KST crosses below its 9‑period SMA → potential sell.
* Centerline cross:
* Moving above zero signals rising momentum; below zero signals falling momentum.
* Divergence:
* Bullish divergence: price makes a lower low while KST makes a higher low — potential reversal up.
* Bearish divergence: price makes a higher high while KST makes a lower high — potential reversal down.
* Overbought/oversold:
* Extended KST extremes can indicate overbought or oversold conditions, but exact thresholds are subjective and depend on the instrument/timeframe.

Example application (practical guidance)

A typical trade using KST:
1. Identify trend context (e.g., use a longer SMA or ADX to confirm trend direction).
2. Watch for KST crossing its signal line in the direction of the trend:
* In an uptrend, prefer KST crosses above the signal line for entries.
* In a downtrend, prefer crosses below the signal line for short entries.
3. Confirm with additional clues: rising volume on a bullish cross, supportive candlestick patterns, or absence of bearish divergence.
4. Manage risk with stops (e.g., recent swing low/high) and position sizing.

Example scenario: KST reaches a high (overbought), then crosses below its signal line while price shows a bearish reversal candlestick and heavier volume — this combination strengthens the sell signal and helps avoid acting on a lone KST cross.

Limitations and best practices

• Lag: KST’s multiple smoothings introduce lag; it may signal after a move is well underway.
• False signals: In choppy markets, crossovers can whipsaw. Use trend filters or confirmatory indicators.
• Parameter sensitivity: Default settings suit many cases but should be adapted and backtested for specific markets/timeframes.
• Combine indicators: Use KST alongside trend indicators, volume analysis, chart patterns, and strict risk controls.

Note

Pring originally described the indicator as the “Summed Rate of Change”; the acronym KST has become the common name.

Bottom line

KST aggregates multiple smoothed rates of change into a single momentum oscillator that highlights shifts in momentum, crossovers, and divergence. It is a useful tool for timing entries and exits but performs best when combined with trend confirmation, other technical signals, and sound risk management.