Know Sure Thing (KST) Indicator: Definition, Formula & Trading Strategy

2026.01.21 2026.01.21
Know Sure Thing (KST) Indicator: Trading Guide for Beginners

Oleg Tkachenkohttps://www.litefinance.org/blog/authors/oleg-tkachenko/

The Know Sure Thing (KST) indicator is a modification of the rate of change (RoC) that measures upward and downward momentum. It has less exposure to market noise because it uses smoothed rate-of-change calculations. KST movements are less erratic, so it gives fewer false signals than the RoC.

The KST also generates reliable confirmation signals when the price breaks out of a flat pattern and the trend reverses. This review provides an overview of how to use this indicator and examples of trading strategies.

Major Takeaways

• The Know Sure Thing (KST) is a momentum oscillator designed to simplify rate-of-change readings. It is an auxiliary tool that confirms the strength of a trend or signals a trend reversal. It is commonly used in conjunction with trend indicators.
• The indicator has two lines: the main KST line and the signal line. The KST line is based on four simple moving averages (SMA) with different rate-of-change (ROC) periods. The signal line is calculated using the SMA with a period of 9.
• The KST can be applied to M30 and higher time frames. The indicator is not suitable for scalping.
• Interpretation of KST: the direction of the main and signal lines shows how the price might move in the future. If the main line is above/below the signal line, it points to an uptrend/downtrend.
• Trading signals: when the main line crosses the signal line from above, short positions can be considered; if the opposite is true, long positions can be opened. Divergence between the price and the KST indicator suggests a potential price reversal.

What Is KST Know Sure Thing Indicator?

The Know Sure Thing is a technical indicator developed by Martin Pring. It is a trend oscillator based on smoothed RoC values and moving averages. This tool shows the strength of price momentum. When momentum fades, the KST signals a looming trend reversal.

The indicator is displayed below the price chart and consists of two lines: the main KST line and the signal line. Both lines move relative to the center line. There are no upper or lower thresholds, so it is important to pay attention to the indicator’s amplitude when looking for signals and ensuring profitable trading decisions.

The KST indicator is available on the LiteFinance online platform, but it is not available in MT4 or MT5, so you need to add it manually. You can download the free version for MT4 here. For MT5, you can find the indicator on the MQL5 website.

In MT4, select File/Open Data Folder to open the platform folder. Add the indicator file to the MQL4/Indicators folder and restart the platform. The indicator will appear in the Insert/Indicators/Custom section.

History and Development of the KST Indicator

The indicator was first introduced by American analyst and entrepreneur Martin Pring in his book titled Martin Pring on Market Momentum. The book focuses on methods of analyzing price trends using momentum indicators. According to Pring, such indicators are well-suited for identifying trend reversal points, showing the fading of momentum, and confirming signals from trend indicators.

The KST is a modified version of the RoC momentum indicator. Pring suggested combining several smoothed RoCs. He argued that this approach filters out market noise and false movements and more accurately shows entry and exit points for trades.

How to Calculate the KST Indicator

Unlike the Stochastic Oscillator and RSI, the KST is more resistant to price noise, better at filtering out false signals, and therefore most effective in trending markets. For this reason, it is used with trend following indicators to confirm the strength of price movements, genuine breakouts of key levels, and potential price reversals.

Advantages of the KST indicator:

• Works with any financial instrument.
• Suitable for intraday, medium- and long-term trading.
• Takes into account short- and long-term periods (number of candles in the calculation). The indicator does not immediately respond to price movements, but it also does not produce false signals.

The indicator can be applied to time frames starting from M30. Statistics on false signals after testing the indicator with various settings on a three-year history showed that the KST generates more errors on M5–M15 time frames. Therefore, the indicator is not suitable for scalping. One optimal trading strategy is to identify a strong impulse on the H4–D1 time frames and open trades on the lower M30–H1 time frames.

The KST can be combined with the following indicators:

• Moving averages. For example, EMA 50 and EMA 200 can be used to analyze long-term time frames. The KST can be used to confirm signals from trend indicators.
• Resistance and support levels. A breakout of key levels amid strong momentum is a reliable trading signal. This way, you can identify trend continuations or moments when the price breaks out of a flat.
• Volume and VWAP. An increase in volume amid strong momentum may signal a strong trend. Conversely, low trading volume suggests a short-term price movement.
• Price Action. These can be trend continuation or reversal patterns. A decrease in momentum when a reversal pattern emerges is a sign that the trend is ending.
• Indicators such as the MACD and RSI can be used to identify trend reversals.

Momentum oscillators are widely considered leading indicators, though some traders say they tend to lag in highly volatile markets. However, this problem can be solved with fine-tuning. Another disadvantage of the KST is that it cannot be used in a flat market. Even if the price range is wide enough to open trades, the indicator often produces whipsaws, resulting in false buy or sell signals.

KST Calculation Formula

The indicator is based on the standard RoC indicator with different periods. The formula for calculating KST is as follows:

1. The RoC indicator calculation. Rate of Change (RoC) shows the speed and strength of price movement and is calculated as the percentage change in the current price relative to the price n periods ago.

RoC = ((P(i)-P(n))/P(n)) × 100%

where:

P(i) – current Close price;

P(n) – Close price n periods ago.

The KST uses four RoC indicators with default periods of 10, 15, 20, and 30. Other periods, such as 9, 12, 18, and 24, can also be used. Different period values make it easier to factor short-, medium-, and long-term price changes into the final calculation.

2. RoC smoothing. All four values with different periods are smoothed using a moving average. In the KST settings, there is no option to change the moving average type; different versions may use a simple moving average (SMA) or an exponential moving average (EMA). Each result is multiplied by a weighting factor. The default smoothing period is 10 for the first three RoCs and 15 for the last value.

The shortest period has the lowest weight, while the longest one has the highest.

3. The values obtained are summed up and divided by the sum of the weights (1+2+3+4 = 10).

KST = (RSMA(1) + RSMA(2) + RSMA(3) + RSMA(4)) / 10

In the indicator code, you can change the weight values for each RoC period. Then the denominator will be different.

4. Signal line calculation. It is calculated by taking a Simple Moving Average (SMA) of the final KST value.

KST Indicator Settings for Different Timeframes

The default KST settings are suitable for intraday trading. For example, on the H1 timeframe, the indicator captures market momentum over the last 24 hours, accounting for different trading sessions (Asia, the US, Europe, Australia), as well as short-term momentum over the last 10 candlesticks. These settings may also be suitable for long-term intervals, but they can be changed to suit the market conditions.

Short-Term KST Settings

You can choose a timeframe between M30 and H1 at your convenience. Notably, increasing the RoC or moving average periods may make the indicator respond more slowly.

Short term KST settings:

Medium-Term KST Settings

The larger the timeframe, the faster Know Sure Thing will respond. Therefore, for medium-term strategies on the H4–D1 timeframe, you need to slightly reduce the periods of medium- and long-term RoC. At the same time, you can increase the smoothing period of moving averages.

KST oscillator settings:

Long-Term KST Settings

RoC periods for timeframes from D1 and above should be reduced even further. As an option, you can use the periods listed in the table, or reduce them by 1-3 units. The smoothing period is decreased to offset the influence of fundamental factors.

KST settings:

How to Read and Interpret KST Trading Signals

Interpretation of the KST indicator:

1. The direction of lines, either upward or downward, indicates whether the price is rising or falling. If both lines are moving in the same direction, they give a stronger signal.

In the second case, the indicator lines are declining while the price is rising. This example shows that the KST indicator is not flawless, and its signals serve only to confirm price movement rather than as primary signals for opening trades.

2. If the KST line is above the signal line, the trend is upward; if the signal line is above the KST line, the trend is downward. The greater the distance between the lines, the stronger the trend. The intersection of the lines signals market uncertainty. An additional signal of price growth is when both lines are above the zero horizontal line. Conversely, both lines below the zero mark confirm a downward trend.

The KST line is yellow, while the signal line is blue. In the first two cases, the indicator showed a strong trend. Both indicator lines quickly diverged and moved in the same direction. In the third and fourth cases, the divergence of the lines was delayed.

KST indicator signals:

1. The intersection of the KST and signal lines at the upper or lower points gives a signal to open a trade. When the KST line crosses the signal line from above, a short position can be considered, and if the opposite is true, a long position can be opened.

The first signal is false: the yellow KST line crosses the signal line from top to bottom, but there is no downward trend. Subsequent signals confirmed a strong trend. The trade can be opened 2–3 candles after the KST lines cross.

2. Zero line crossing. When the main line crosses the zero horizontal line, it can serve as an additional confirmation signal. You can open trades in the direction of the KST lines. However, this signal is considered weak, so you should only rely on it as a last resort.

3. Bullish and bearish divergence. A divergence between the indicator’s direction and the price suggests a possible reversal towards the KST line. It is better to zoom out on the chart to find several extremes for drawing the trend line.

In the first section of the chart, the KST is rising, confirming the uptrend. In the second section, the indicator’s highs are decreasing, but the price continues to reach new highs. A bearish divergence emerges, and then the uptrend turns into a downtrend.

Example of a trading strategy. The setup is following:

• Timeframe: H1–H4.
• KST settings: (10,15,20,30; 10,10,10,15 ; 9).
• EMA settings: EMA (8), EMA (12), EMA (24), EMA (72).
• Trading assets: major currency pairs.

Let’s take the EUR/USD pair as an example. In addition to the KST, exponential moving averages (EMA) with short and long periods are used.

Main signal: three EMAs with short periods should move in the same direction above/below the EMA (72).

On the chart above, we can see the following:

1. Three short-term moving averages and the price are above the long-term moving average (purple line). The KST is above the zero line, and the main and signal lines are trending upward. A trade can be opened on the second candlestick after the short-term EMA crosses the long-term one.

2. There is a bearish divergence and bearish momentum. The price at point 2 returned to the break-even level, but a stop-loss was not triggered. The optimal scenario is to close the trade at the high, where the KST values have already turned down.

3. Close the trade if it has not been done before. The short-term moving averages moved down and crossed the EMA(72), while the KST values crossed the zero mark and settled below it.

Follow the main principle of the strategy: if the KST uses and smooths the RoC of different periods, then trend indicators should also have different periods to maintain balance.

Conclusion

The KST is a modified version of the RoC momentum indicator that is less susceptible to sharp price swings because it smooths RoC using different periods.

The indicator is far from perfect, as it generates a relatively large number of false signals. However, these can be filtered out using other technical analysis tools, such as the RSI and MACD.

The Know Sure Thing is best used as an auxiliary tool to confirm breakouts of key levels or trend reversals.

There is no such thing as a perfect trading tool, and the KST indicator will not provide 100% accurate signals. It is important to combine it correctly with other technical indicators, which can be done using a strategy tester. For example, the built-in MT4 tester or FX Blue, Forex Simulator. Testing takes time and patience, but this way you can minimize risks and gain valuable experience. Good luck trading!