Know Sure Thing

Description:

The Know Sure Thing (KST) indicator, developed by Martin Pring, amalgamates four smoothed price indicators to offer insights into market momentum and potential trend shifts. Comprising Rate of Change (ROC), Weighted Moving Average (WMA), Simple Moving Average (SMA), and Double Smoothed ROC (DS-ROC), the KST smooths price data across various timeframes to generate a single composite oscillator. Traders leverage this oscillator to identify bullish or bearish divergences between the KST line and the price chart, enabling them to discern potential buying or selling opportunities. When the KST crosses above its signal line, it often signals a bullish trend, whereas a cross below the signal line may indicate a bearish trend, aiding traders in making informed decisions and navigating market movements more effectively.

Input Parameters:

ROCLen1: Length for the first Rate of Change.
ROCLen2: Length for the second Rate of Change.
ROCLen3: Length for the third Rate of Change.
ROCLen4: Length for the fourth Rate of Change.
SMA Len1: Length for the SMA for ROCLen1.
SMA Len2: Length for the SMA for ROCLen2.
SMA Len3: Length for the SMA for ROCLen3.
SMA Len4: Length for the SMA for ROCLen4.
Signal: Length of the SMA used for the KST plot.
Price Source: The specific data points (such as open, high, low, or close) from each candle in a financial chart that an indicator uses for mathematical computations, enabling the calculation of metrics like the average over a specified period.
Symbol (Alternate): Used as a comparative data series.

Use Cases:

Trend Confirmation: Traders use the KST indicator to confirm the strength and direction of a trend. When the KST line is rising and crosses above its signal line, it suggests increasing upward momentum and potentially signals a bullish trend. Conversely, if the KST line is falling and crosses below its signal line, it indicates weakening momentum and may signal a bearish trend. By confirming trends, traders can make more confident decisions about entering or exiting positions.
Divergence Identification: The KST indicator is effective in identifying bullish or bearish divergences between the KST line and the price chart. Bullish divergence occurs when the price makes lower lows while the KST indicator makes higher lows, suggesting that momentum is shifting upward despite the price continuing to decline. Conversely, bearish divergence occurs when the price makes higher highs while the KST indicator makes lower highs, indicating potential weakness in the uptrend. Traders use these divergences as early warning signals for potential trend reversals or continuation patterns.
Overbought and Oversold Conditions: Similar to other momentum oscillators, the KST indicator can also help identify overbought and oversold conditions in the market. When the KST line reaches extreme levels above its signal line, it suggests that the market may be overbought and due for a correction. Conversely, when the KST line reaches extreme levels below its signal line, it indicates that the market may be oversold and due for a potential rebound. Traders can use these signals to adjust their trading strategies, such as taking profits in overbought conditions or considering long positions in oversold conditions.

This feature can be used in: