Know Sure Thing (KST) on Gold

What it shows

A green KST line and a red signal line weave around zero below the candles. The red one is a 9-candle average of the green, so the green line crossing it marks a turn in the blend before it ever reaches zero.

How Pravex works it out

1. Work out four rates of change of the close, each as a percent: over 10, 15, 20 and 30 candles.
2. Smooth each one with a simple average, over 10, 10, 10 and 15 candles.
3. KST = 1 × part 1 + 2 × part 2 + 3 × part 3 + 4 × part 4, so the slowest part counts four times as much as the quickest.
4. Signal = the simple average of the KST over the last 9 candles.
5. Weights in action, with made-up parts: if the four smoothed parts are 1, 0.5, 0.5 and -0.25, the KST is 1 + 1 + 1.5 − 1 = 2.5.

Settings

Setting	Default	What changing it does
Lookback 1	10	Candles back for the first rate of change, the quickest one. Shorter reacts to small swings; longer ignores them.
Lookback 2	15	Candles back for the second rate of change. Keep it above the first so the four parts cover different time spans.
Lookback 3	20	Candles back for the third rate of change.
Lookback 4	30	Candles back for the fourth rate of change, the slowest one. It carries the biggest weight, so raising it makes the whole line steadier.
Averaging 1	10	How many candles the first rate of change is averaged over. Higher smooths more and lags more.
Averaging 2	10	The averaging length for the second rate of change.
Averaging 3	10	The averaging length for the third rate of change.
Averaging 4	15	The averaging length for the fourth rate of change.
Signal average length	9	The span of the simple average that draws the red line. At 5 instead of 9 the red line sits almost on top of the green, and they cross on every wobble.

How traders read it

The zero line splits the two states. A KST above zero says the weighted gains outweigh the losses, below zero the reverse. A move through zero is slow to arrive, because every part is averaged before it is added.

The green line crossing the red one comes sooner. Crossing up while both are still under zero is the early read of a turn; the same cross above zero is a push already under way.

Since the 30-candle part weighs the most, the line mostly follows the slower swing. A fast spike in the 10-candle part moves it less than you might expect.

When it misleads

Four averages before the sum, and a fifth for the Signal, make the KST late. By the time it crosses zero on gold, much of the move is often done. In a sideways range it crosses its Signal again and again with no follow-through. In a run of small candles the fast parts barely move, and the line drifts.

Questions and answers

Where do the 10, 15, 20 and 30 lookbacks come from?

That is the daily set Martin Pring published for the KST, with averages of 10, 10, 10 and 15. On hourly gold the four lookbacks span roughly a day and a half, so the line tracks swings within the week.

What is the difference between the KST and the Coppock Curve?

Both add rates of change of the close. The Coppock Curve uses two of them and one weighted average. The KST uses four, each smoothed, with weights 1 to 4, and draws a Signal as well.

What does the red line do?

It is the simple average of the KST over 9 candles by default. When the KST crosses it, the KST has turned against its own recent average, an earlier and noisier hint than a cross of zero.

Why is the KST line empty at the start of the chart?

The 30-candle rate of change and its 15-candle average need data first. The line begins once enough candles have loaded.

Related: Pring’s Special K, Coppock Curve, Price Momentum Oscillator, every indicator.