#1 Guide for Better Understanding of Know Sure Thing indicator on IQ Option


Know Sure Thing indicator

Key Takeaways๐Ÿ”‘

โ†’The Know Sure Thing (KST) indicator is a momentum oscillator that combines data from four price cycles.
โ†’KST generates signals from centerline and signal line crossovers, and can be used to identify divergences.
โ†’Experimenting with KST settings can improve its effectiveness for different market conditions.

What is the Know Sure Thing indicator?

The Know Sure Thing indicator, known as KST, was invented by Martin Pring. It is a momentum oscillator for four various time frames founded on the smoothed rate-of-change. It combines the data from four cycles of the price into a singular indicator. It helps to determine the divergences as well as the centerline and signal line crossovers.

How to add the KST to the chart on IQ Option?

Once you are logged in to your IQ Option account, choose the asset and set the type of the chart. Then, click on the indicator icon on the left side of the trading interface. You will find the Know Sure Thing among the Momentum indicators.

Also, you can just start typing the name of the indicator in the search window.

How to add Know Sure Thing indicator to the chart
How to add the Know Sure Thing indicator to the chart

Calculations and settings

The Know Sure Thing indicator formula may seem very complicated at first sight. But they come down to the smoothed average from four different rate-of-change values.

The default settings are as follows:

The rate-of-change periods are 10, 15, 20 and 30.

The moving averages for the RoCs are 10, 10, 10 and 15.

There is a signal line added which is a simple moving average with period 9.

Settings of Know Sure Thing Indicator
Wow! That is a lot of settings!

The Know Sure Thing indicator together with the signal line is displayed in a separate window below the price chart.

KST and Signal Line in indicators window
KST and Signal Line in the indicator's window

How do you read KST indicator on IQ Option?

The KST oscillates around the zero line. Its reading is positive when it moves above the zero line and negative when it goes below it. When the indicator fluctuates above the middle line it signifies the bulls dominance and the price is rising. The negative reading reflects the bears in control over the market and thus the price is falling.

Another type of signals produced by the KST is the signal line crossover. When the KST line is rising above the signal line and the reading is negative, this signifies the end of the downtrend. When the KST is falling below the signal line and the reading is positive, the uptrend is coming to an end.

You can use both signals to create your own Know Sure Thing indicator strategy.

Two types of signals generated by Know Sure Thing indicator
Two types of signals generated by the Know Sure Thing indicator

There are also other types of signals provided by the Know Sure Thing indicator. However, the centerline and the signal line crossovers are the most popular and productive.

Note, that there are no limits how low or how high the KST may go. Thus, it does not show the oversold or overbought areas, in opposition to the RSI or the Stochastic.

Pros and Cons of the Know Sure Thing Indicator ๐Ÿ“Š

Pros:

  • ๐Ÿ‘ Combines data from four price cycles, providing a comprehensive momentum analysis.
  • ๐Ÿ‘ Identifies trend reversals through centerline and signal line crossovers.
  • ๐Ÿ‘ Can detect divergences that may indicate potential trading opportunities.

Cons:

  • ๐Ÿ‘Ž KST settings may require adjustment for different market conditions.
  • ๐Ÿ‘Ž Does not indicate oversold or overbought conditions like the RSI or Stochastic.
  • ๐Ÿ‘Ž Not as effective against strong trends; signal line crossovers may produce false signals.

Know Sure Thing Indicator Components Default Settings
Rate-of-Change Periods 10, 15, 20, and 30
Moving Averages for RoCs 10, 10, 10, and 15
Signal Line (Simple Moving Average) 9

Searching for divergences

The KST can be also analysed in terms of divergences. Though, it is a good idea to wait for a large divergence. Take a look at the picture below. There is one bearish and one bullish divergence marked. Both ends with the signal line crossovers.

Bearish and bullish divergencies
Bearish and bullish divergences

Crossovers in a strong trend

During a strong uptrend, the KST indicator moves in the positive zone and may reach quite high values. Then, it goes down, but never leaves the positive territory. This is a signal of the temporary slow down of the upside momentum and not the reverse of the trend. Similarly, during a strong downtrend, the KST stays in the negative area. Occasionally it rises a bit, which shows a slow down of the downside momentum, but the trend continues the previous direction. You should not trade with the signal line crossovers when there is a strong trend.

KST and signal line crossovers doesn't work against strong trend
The KST and signal line crossovers do not work against a strong trend

Final words

The Know Sure Thing catches the price in four different cycles. It builds on the smoothed rate-of-change over four various periods.

The KST indicator has its weak points. Martin Pring invites traders to experiment with the indicator's settings. More sensitive settings are required when used for the less volatile markets and vice versa.

Pring's oscillator cannot be used for identifying the oversold and overbought zones. But it gives good trading signals when the lines of the indicator cross each other and when it breaks the trend line established on itself.

Give the Know Sure Thing a try on the IQ Option demo account. You will not risk your money there, but you will get a chance to know the indicator well.

Share your thoughts in the comments section below.

Good luck!

Frequently Asked Questions about the Know Sure Thing Indicator ๐Ÿ“Œ

  • Q: How does the KST indicator help traders identify potential trading opportunities?
    A: The KST indicator helps traders identify potential trading opportunities through centerline and signal line crossovers, as well as detecting divergences between price and the indicator.
  • Q: Can the KST indicator identify oversold and overbought conditions?
    A: No, the KST indicator does not identify oversold and overbought conditions like the RSI or Stochastic indicators.
  • Q: How can the KST indicator be adjusted for different market conditions?
    A: Adjusting the rate-of-change periods and moving averages for RoCs can make the KST indicator more sensitive or less sensitive depending on market volatility.
  • Q: Can the KST indicator be used during strong trends?
    A: The KST indicator is not as effective against strong trends, as signal line crossovers may produce false signals during these periods.
  • Q: How can a trader practice using the KST indicator without risking real money?
    A: Traders can practice using the KST indicator on a demo account, such as the one offered by IQ Option, without risking real money.

GENERAL RISK WARNING

The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.
Kindly note that this article does not provide any investment advice. The information presented regarding past events or potential future developments is solely an opinion and cannot be guaranteed as factual, including the provided examples. We caution readers accordingly.

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Bart Bregman

Author / IQ Option expert: "My name is Bart Bregman, I have 9 years of full-time professional trading experience. I've been trading with IQ Option for more than 7 years, mainly on the shorter time frames doing technical analyses, and have many experience with Binary Options, CFDs, Options, and Crypto trading. There is no such thing as a bad trade! As a digital nomad trader, I'm mostly traveling all over the world. Follow my journey on Instagram at https://www.instagram.com/bart_bregman/. "

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