Certain Things - MetaTrader 5 Script | Martin EA Download - MT4/MT5 Resources - MetaTrader 5 Resources

The Know Sure Thing (KST) indicator is an oscillator based on momentum represented by the Rate of Change (ROC). It is the ROC for four different periods smoothed with a simple moving average (SMA). From these four ROC series, the final value is calculated, which oscillates between positive and negative values ​​above and below the zero line. The indicator's signal line is the calculated SMA of the KST line. Essentially, the Know Sure Thing indicator measures momentum over four separate price cycles.

The KST indicator was developed by Martin Pring and launched in 1992 in Stocks & Commodities magazine.

calculate .

The default calculation periods for ROC, smoothing and signal lines are: 10,15,20,30,10,10,10,10,10,15,9.

 ROCMA1 = SMA(ROC( 10 ), 10 )
ROCMA1 = SMA(ROC( 15 ), 10 )
ROCMA1 = SMA(ROC( 20 ), 10 )
ROCMA1 = SMA(ROC( 30 ), 15 )
KST = ROCMA1 + (ROCMA2 * 2 ) + (ROCMA3 * 3 ) + (ROCMA4 * 4 )
Signal = SMA(KST, 9 )

KST takes the rate of price change for four different time periods, smooths them and summarizes the results.

The general rule is that when KST is positive, momentum increases, and when KST is negative, momentum decreases. This could mean bullish and bearish markets respectively.

It should be noted that the calculation and smoothing periods used in the indicator parameters are chosen by the trader. Pring recommends the following parameter values ​​for daily, weekly and monthly charts:

 D1: ( 10 , 15 , 20 , 30 , 10 , 10 , 10 , 15 , 9 ) W1: ( 10 , 13 , 15 , 20 , 10 , 13 , 15 , 20 , 9 ) Minnesota: ( 9 , 12 , 18 , 24 , 6 , 6 , 6 , 9 , 9 )

Divergence occurs when a price movement is not confirmed by the indicator value. This could be a sign that current momentum is not supporting prices and a market reversal may be imminent.
KST bullish divergence is when the price falls while KST rises. Bearish divergence is the opposite when price rises and KST falls.

Overbought/Oversold

Relative to other oscillators with a given data range, KST does not depend on any range. Therefore, determining true overbought and oversold levels requires some research and experimentation with historical data for the relevant chart periods. In most cases, overbought and oversold conditions in KST are good for confirming a trend, but not good for reversing it. Overbought can be seen as a sign of a strengthening bull market, while oversold can be seen as a sign of a strengthening bear market.

cross

There are two different types of intersections when analyzing KST:

Zero line crossovers are typically highly lagging and unreliable and are more likely to indicate a continuation of the current trend, whereas signal line crossovers can signal a significant change in momentum.

If the KST line is negative while crossing the signal line from bottom to top, upward momentum is increasing.

If the KST line is positive while crossing the signal line from top to bottom, downward momentum increases.

The Know Sure Thing (KST) indicator is similar to many other technical analysis indicators in that it has both advantages and disadvantages and should not be used as a standalone signal generation system. Since this indicator uses a series of moving averages, it has an inherent latency. This can cause simple signals (such as crossing a neutral line) to be unreliable. However, when overbought and oversold conditions are used, this indicator can be considered useful, not as a method of determining a reversal, but as confirmation of trend direction. The intersection of the signal line with confirmation signals from other indicators shows the effectiveness of predicting price movements.

Attachment download

📎 knowsurething.mq5 (7.75 KB)

Source: MQL5 #49265