Description

• Invented by Martin Pring, it is a weighted average ROC (Rate of Change) of four different periods
• Author has used 9, 12, 18, 24 as default bars for 4 different ROC used to build single line of KST
• Weight is given to each period based on its length. Higher the length more is weight to make values smooth and filtering short-term noise
• Since ROC is a very sensitive price change, KST considers price changes, which are significant and trigger trend reversal

Interpretation

• In order to give early signal of change in price, average of KST is plot to give crossover signal
• If Roc moves above zero levels, price is in positive trend
• If Roc moves below zero levels, price is in negative trend

Default Parameters Used/Inputs

• High Line
• Low Line
• Period

Returns/Output

Know Sure Thing value of the stock based on parameters

Formula

KST = ∑ (Smoothen(Rate of Change) * Weighted)
Calculation is carried out as :
Rate of Change