The Know Sure Thing (KST) is a momentum oscillator developed by Martin Pring that combines four different rate of change measurements into one indicator. It was designed to capture both short-term and long-term momentum, providing a comprehensive view of market momentum across multiple timeframes.
What is the Know Sure Thing Indicator?
The KST indicator smooths and combines four weighted rate of change (ROC) calculations. By using multiple timeframes, it filters out noise while still being responsive enough to catch important momentum shifts. The result is a powerful tool for identifying trend changes and confirming price movements.
Key insight: The KST was originally called the "Summed Rate of Change" because it adds together four different ROC calculations. Pring renamed it "Know Sure Thing" because he believed it provided a more certain read on momentum than single-timeframe indicators.
How KST is Calculated
The KST combines four smoothed ROC calculations with different lookback periods and weights:
KST Formula (Daily Charts)
ROC1 = 10-period ROC, smoothed with 10-period SMA (weight: 1)
ROC2 = 15-period ROC, smoothed with 10-period SMA (weight: 2)
ROC3 = 20-period ROC, smoothed with 10-period SMA (weight: 3)
ROC4 = 30-period ROC, smoothed with 15-period SMA (weight: 4)
KST = (ROC1 x 1) + (ROC2 x 2) + (ROC3 x 3) + (ROC4 x 4)
Signal Line = 9-period SMA of KST
Understanding KST Components
The Four Timeframes
Each ROC component captures different market cycles:
- ROC1 (10-period): Captures short-term momentum
- ROC2 (15-period): Captures short-to-medium momentum
- ROC3 (20-period): Captures medium-term momentum
- ROC4 (30-period): Captures longer-term momentum
The Weighting System
Longer timeframes receive more weight because they are considered more significant:
- The 30-period ROC has 4x the influence of the 10-period ROC
- This weighting prioritizes the dominant trend while still capturing shorter cycles
- The result is a smoother indicator that responds to major moves
Reading KST Signals
Zero Line Crossovers
- KST crosses above zero: Momentum turning bullish
- KST crosses below zero: Momentum turning bearish
- These signals are most significant after extended moves in the opposite direction
Signal Line Crossovers
- KST crosses above signal line: Bullish signal
- KST crosses below signal line: Bearish signal
- These provide earlier signals than zero line crossovers
Divergences
- Bullish divergence: Price makes lower low, KST makes higher low
- Bearish divergence: Price makes higher high, KST makes lower high
- Divergences are often the strongest KST signals
KST Trading Strategies
Strategy 1: Classic Crossover System
- Buy when KST crosses above its signal line
- Sell when KST crosses below its signal line
- Use the zero line for additional confirmation
- Crossovers above zero are bullish; below zero are bearish
Crossover Trade Example
Stock ABC is trending higher:
- KST is above zero, confirming the uptrend
- Price pulls back and KST dips toward its signal line
- KST bounces and crosses above the signal line again
- This signals that the pullback is ending and the uptrend resuming
- Enter long with a stop below the pullback low
Strategy 2: Divergence Trading
- Wait for price to make a new swing high or low
- Check if KST confirms or diverges from price
- If diverging, wait for a signal line crossover to confirm
- Enter in the direction of the divergence signal
Strategy 3: Trend Confirmation
- Identify trend direction using price action or moving averages
- Only take long signals when KST is above zero
- Only take short signals when KST is below zero
- This filter eliminates many counter-trend losers
Adjusting KST for Different Timeframes
Weekly Charts
For position trading on weekly charts, Martin Pring recommends:
- ROC periods: 10, 13, 15, 20
- SMA smoothing: 10, 13, 15, 20
- Signal line: 9-period SMA
Monthly Charts
For long-term investing on monthly charts:
- ROC periods: 9, 12, 18, 24
- SMA smoothing: 6, 6, 6, 9
- Signal line: 9-period SMA
Short-Term Trading
For more active trading, you can reduce the periods:
- ROC periods: 5, 10, 15, 20
- SMA smoothing: 5, 5, 5, 10
- This produces faster but potentially noisier signals
Advantages of KST
- Multi-timeframe analysis: Combines four cycles into one view
- Smooth signals: Multiple smoothing steps reduce whipsaws
- Weighted emphasis: Prioritizes longer-term momentum
- Clear signals: Zero line and signal line provide multiple confirmation points
Limitations of KST
- Lagging nature: All the smoothing creates lag in signals
- Complex calculation: More parameters mean more potential for curve fitting
- Best for trending markets: Can produce false signals during consolidation
Combining KST with Other Tools
KST and Moving Averages
Use a 50-period or 200-period moving average to determine the trend. Only take KST buy signals when price is above the moving average, and sell signals when below.
KST and Support/Resistance
KST signals are more reliable when they occur at key support or resistance levels. A bullish KST crossover at support is stronger than one in the middle of a range.
Track Your KST Trading Performance
Pro Trader Dashboard helps you analyze which technical indicators work best for your trading style. Track your KST-based trades and measure your actual results.
Summary
The Know Sure Thing indicator is a sophisticated momentum tool that combines four rate of change measurements into a single, comprehensive indicator. Its multi-timeframe approach and weighted smoothing make it excellent for identifying significant momentum shifts while filtering out noise. Use it alongside other analysis methods for best results.
Want to learn about more momentum indicators? Check out our TRIX Indicator Guide or explore the Mass Index Indicator.