Master the Market with the Know Sure Thing (KST) Indicator

Explore the Know Sure Thing (KST)—a powerful momentum oscillator developed to enhance your trading strategy. Learn how to calculate, understand, and effectively use KST for identifying potential buy and sell signals.

What is the Know Sure Thing (KST)?

The Know Sure Thing (KST) is a momentum oscillator developed by Martin Pring to simplify the interpretation of rate-of-change readings for traders.

Key Takeaways

  • The Know Sure Thing (KST) is a momentum oscillator designed to assist traders in interpreting rate-of-change price data.
  • Trading signals are generated when the KST crosses over the signal line, but traders also look for overbought or oversold conditions.
  • Traders often combine the KST with other technical analysis methods to increase their chances of making successful trades.

Calculating the Know Sure Thing (KST)

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

The calculation for KST is as follows:

$$ KST = ( RCMA #1 × 1 ) + ( RCMA #2 × 2 ) + ( RCMA #3 × 3 ) + ( RCMA #4 × 4 ) \ \textbf{where:}
RCMA #1 = 10-period SMA of 10-period ROC\ RCMA #2 = 10-period SMA of 15-period ROC\ RCMA #3 = 10-period SMA of 20-period ROC\ RCMA #4 = 15-period SMA of 30-period ROC $$

Finally, the signal line is calculated by taking the 9-period SMA of the KST value.

Understanding the Know Sure Thing (KST)

The KST indicator can be utilized similarly to other momentum oscillators such as the well-known relative strength index (RSI). Trading signals are generated when the KST crosses over the signal line. However, traders may also look for convergence and divergence with the price, overbought or oversold conditions, or crossovers of the centerline.

Many traders combine the KST indicator with other forms of technical analysis to maximize their chances of success. For instance, traders may look at other non-momentum indicators, chart patterns, or candlestick patterns to assist in their decision-making process.

Example of the Know Sure Thing (KST)

Let’s explore an example chart:

In the example above, the KST indicator reached highly overbought conditions in early February and eventually experienced a crossover, generating a well-timed sell signal. The indicator also crossed over in late February, mid-March, and mid-April with limited success. The key is to look for both overbought or oversold conditions, as well as a crossover, to signal the trade.

Traders might also use additional technical analysis methods to improve their chances of making successful trades. For example, traders observing the above chart may consider the significant bearish volume on the day of the signal or the candlestick patterns that led up to the trading signal when making their decision. These additional insights can help avoid less profitable trades suggested by the KST indicator.

Related Terms: simple moving average, rate of change, signal line, relative strength index.


  1. Stocks and Commodities. “Summed Rate Of Change (KST)”.

Get ready to put your knowledge to the test with this intriguing quiz!

--- primaryColor: 'rgb(121, 82, 179)' secondaryColor: '#DDDDDD' textColor: black shuffle_questions: true --- ## What does the Know Sure Thing (KST) indicator measure? - [ ] Volume in trading - [x] Rate of change of four different rates of change - [ ] Fundamental analysis - [ ] Trend reversal ## What's the primary purpose of the Know Sure Thing (KST) indicator? - [ ] Identifying the intrinsic value of a stock - [ ] Measuring market sentiment - [x] Identifying potential price reversals and trend ambiguity - [ ] Assessing a company's balance sheet ## Who developed the Know Sure Thing (KST) oscillator? - [ ] John Bollinger - [ ] Charles Dow - [x] Martin Pring - [ ] Alexander Elder ## Which key component is NOT part of the KST calculation? - [ ] Moving averages - [ ] Smoothing factors - [x] Price-to-earnings ratio - [ ] Rate of change ## How many moving averages are used in calculating the Know Sure Thing (KST) indicator? - [ ] One - [x] Four - [ ] Two - [ ] Six ## What type of trading strategy can the Know Sure Thing (KST) indicator assist with? - [x] Momentum trading - [ ] Arbitrage trading - [ ] Value investing - [ ] Buy-and-hold strategy ## What key signal does the KST provide that indicates a buying opportunity? - [ ] KST reaching its maximum value - [x] KST crossing above its signal line - [ ] Increase in trading volume - [ ] Moving averages alignment ## In the KST, what is a common use for the term "Signal Line"? - [ ] A trendline on a price chart - [x] A moving average of the KST - [ ] Support levels - [ ] Resistance levels ## Which of the following is NOT an advantage of using the KST indicator? - [ ] Identifying trend reversals - [ ] Visualizing momentum changes - [ ] Multiple time frame analysis - [x] Predicting future price levels with certainty ## What common chart pattern observation is useful when interpreting the KST indicator? - [ ] Fibonacci retracement levels - [x] Divergence between price and the KST reading - [ ] Candlestick patterns - [ ] Harmonic patterns