Know Sure Thing Oscillator: ROC Momentum, Crossovers, and Divergence
Summary
The Know Sure Thing (KST) is presented as a momentum oscillator combining four rate-of-change series measured over different periods. Each series is smoothed with a simple moving average, then weighted and combined; a further moving average forms the signal line. The document gives default parameter sets and alternative recommendations for daily, weekly, and monthly charts. Positive and negative KST readings are described as indicating rising and falling momentum, respectively.
The discussion covers divergences between price and KST, signal-line crossovers, and zero-line crossings. It characterizes zero-line crossings as lagging and less reliable, while signal-line crossings may mark momentum changes. KST has no fixed upper or lower bounds, so overbought and oversold levels require experimentation on historical data for the instrument and timeframe. The text cautions that smoothing creates delay and says KST should not be used alone; it offers no empirical performance results or systematic testing procedure.
Key ideas
- KST combines four differently timed, smoothed rate-of-change series with increasing weights.
- A separate simple moving average of KST serves as its signal line.
- Price divergence and signal-line crossings can be used to assess momentum changes.
- Zero-line crossings may lag, and KST has no fixed overbought or oversold thresholds.
- The indicator is delayed by smoothing and is not presented as a standalone trading system.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.