Know Positive Factor (KST) Indicator: Definition, System & Buying and selling Technique

2026.01.21 2026.01.21
Know Positive Factor (KST) Indicator: Buying and selling Information for Newbies

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

The Know Positive Factor (KST) indicator is a modification of the speed of change (RoC) that measures upward and downward momentum. It has much less publicity to market noise as a result of it makes use of smoothed rate-of-change calculations. KST actions are much less erratic, so it offers fewer false indicators than the RoC.

The KST additionally generates dependable affirmation indicators when the value breaks out of a flat sample and the pattern reverses. This evaluate supplies an summary of the way to use this indicator and examples of buying and selling methods.

Main Takeaways

• The Know Positive Factor (KST) is a momentum oscillator designed to simplify rate-of-change readings. It’s an auxiliary instrument that confirms the energy of a pattern or indicators a pattern reversal. It’s generally used together with pattern indicators.
• The indicator has two traces: the principle KST line and the sign line. The KST line relies on 4 easy transferring averages (SMA) with completely different rate-of-change (ROC) intervals. The sign line is calculated utilizing the SMA with a interval of 9.
• The KST could be utilized to M30 and better time frames. The indicator will not be appropriate for scalping.
• Interpretation of KST: the path of the principle and sign traces reveals how the value would possibly transfer sooner or later. If the principle line is above/beneath the sign line, it factors to an uptrend/downtrend.
• Buying and selling indicators: when the principle line crosses the sign line from above, quick positions could be thought of; if the other is true, lengthy positions could be opened. Divergence between the value and the KST indicator suggests a possible value reversal.

What Is KST Know Positive Factor Indicator?

The Know Positive Factor is a technical indicator developed by Martin Pring. It’s a pattern oscillator primarily based on smoothed RoC values and transferring averages. This instrument reveals the energy of value momentum. When momentum fades, the KST indicators a looming pattern reversal.

The indicator is displayed beneath the value chart and consists of two traces: the principle KST line and the sign line. Each traces transfer relative to the middle line. There are not any higher or decrease thresholds, so it is very important take note of the indicator’s amplitude when on the lookout for indicators and guaranteeing worthwhile buying and selling choices.

The KST indicator is on the market on the LiteFinance on-line platform, however it isn’t accessible in MT4 or MT5, so it’s good to add it manually. You’ll be able to obtain the free model for MT4 right here. For MT5, you will discover the indicator on the MQL5 web site.

In MT4, choose File/Open Information Folder to open the platform folder. Add the indicator file to the MQL4/Indicators folder and restart the platform. The indicator will seem within the Insert/Indicators/Customized part.

Historical past and Improvement of the KST Indicator

The indicator was first launched by American analyst and entrepreneur Martin Pring in his ebook titled Martin Pring on Market Momentum. The ebook focuses on strategies of analyzing value developments utilizing momentum indicators. In keeping with Pring, such indicators are well-suited for figuring out pattern reversal factors, exhibiting the fading of momentum, and confirming indicators from pattern indicators.

The KST is a modified model of the RoC momentum indicator. Pring steered combining a number of smoothed RoCs. He argued that this method filters out market noise and false actions and extra precisely reveals entry and exit factors for trades.

Find out how to Calculate the KST Indicator

Not like the Stochastic Oscillator and RSI, the KST is extra resistant to cost noise, higher at filtering out false indicators, and due to this fact best in trending markets. Because of this, it’s used with pattern following indicators to substantiate the energy of value actions, real breakouts of key ranges, and potential value reversals.

Benefits of the KST indicator:

• Works with any monetary instrument.
• Appropriate for intraday, medium- and long-term buying and selling.
• Takes into consideration short- and long-term intervals (variety of candles within the calculation). The indicator doesn’t instantly reply to cost actions, but it surely additionally doesn’t produce false indicators.

The indicator could be utilized to time frames ranging from M30. Statistics on false indicators after testing the indicator with numerous settings on a three-year historical past confirmed that the KST generates extra errors on M5–M15 time frames. Due to this fact, the indicator will not be appropriate for scalping. One optimum buying and selling technique is to establish a powerful impulse on the H4–D1 time frames and open trades on the decrease M30–H1 time frames.

The KST could be mixed with the next indicators:

• Shifting averages. For instance, EMA 50 and EMA 200 can be utilized to research long-term time frames. The KST can be utilized to substantiate indicators from pattern indicators.
• Resistance and assist ranges. A breakout of key ranges amid robust momentum is a dependable buying and selling sign. This fashion, you’ll be able to establish pattern continuations or moments when the value breaks out of a flat.
• Quantity and VWAP. A rise in quantity amid robust momentum might sign a powerful pattern. Conversely, low buying and selling quantity suggests a short-term value motion.
• Value Motion. These could be pattern continuation or reversal patterns. A lower in momentum when a reversal sample emerges is an indication that the pattern is ending.
• Indicators such because the MACD and RSI can be utilized to establish pattern reversals.

Momentum oscillators are extensively thought of main indicators, although some merchants say they have a tendency to lag in extremely risky markets. Nevertheless, this drawback could be solved with fine-tuning. One other drawback of the KST is that it can’t be utilized in a flat market. Even when the value vary is large sufficient to open trades, the indicator typically produces whipsaws, leading to false purchase or promote indicators.

KST Calculation System

The indicator relies on the usual RoC indicator with completely different intervals. The system for calculating KST is as follows:

1. The RoC indicator calculation. Price of Change (RoC) reveals the velocity and energy of value motion and is calculated as the proportion change within the present value relative to the value n intervals in the past.

RoC = ((P(i)-P(n))/P(n)) × 100%

the place:

P(i) – present Shut value;

P(n) – Shut value n intervals in the past.

The KST makes use of 4 RoC indicators with default intervals of 10, 15, 20, and 30. Different intervals, reminiscent of 9, 12, 18, and 24, will also be used. Totally different interval values make it simpler to issue short-, medium-, and long-term value adjustments into the ultimate calculation.

2. RoC smoothing. All 4 values with completely different intervals are smoothed utilizing a transferring common. Within the KST settings, there is no such thing as a choice to vary the transferring common kind; completely different variations might use a easy transferring common (SMA) or an exponential transferring common (EMA). Every result’s multiplied by a weighting issue. The default smoothing interval is 10 for the primary three RoCs and 15 for the final worth.

The shortest interval has the bottom weight, whereas the longest one has the very best.

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

Within the indicator code, you’ll be able to change the load values for every RoC interval. Then the denominator might be completely different.

4. Sign line calculation. It’s calculated by taking a Easy Shifting Common (SMA) of the ultimate KST worth.

KST Indicator Settings for Totally different Timeframes

The default KST settings are appropriate for intraday buying and selling. For instance, on the H1 timeframe, the indicator captures market momentum over the past 24 hours, accounting for various buying and selling periods (Asia, the US, Europe, Australia), in addition to short-term momentum over the past 10 candlesticks. These settings can also be appropriate for long-term intervals, however they are often modified to swimsuit the market circumstances.

Brief-Time period KST Settings

You’ll be able to select a timeframe between M30 and H1 at your comfort. Notably, rising the RoC or transferring common intervals might make the indicator reply extra slowly.

Brief time period KST settings:

Medium-Time period KST Settings

The bigger the timeframe, the quicker Know Positive Factor will reply. Due to this fact, for medium-term methods on the H4–D1 timeframe, it’s good to barely cut back the intervals of medium- and long-term RoC. On the identical time, you’ll be able to enhance the smoothing interval of transferring averages.

KST oscillator settings:

Lengthy-Time period KST Settings

RoC intervals for timeframes from D1 and above ought to be diminished even additional. As an choice, you should utilize the intervals listed within the desk, or cut back them by 1-3 items. The smoothing interval is decreased to offset the affect of basic elements.

KST settings:

Find out how to Learn and Interpret KST Buying and selling Indicators

Interpretation of the KST indicator:

1. The path of traces, both upward or downward, signifies whether or not the value is rising or falling. If each traces are transferring in the identical path, they offer a stronger sign.

Within the second case, the indicator traces are declining whereas the value is rising. This instance reveals that the KST indicator will not be flawless, and its indicators serve solely to substantiate value motion fairly than as main indicators for opening trades.

2. If the KST line is above the sign line, the pattern is upward; if the sign line is above the KST line, the pattern is downward. The larger the gap between the traces, the stronger the pattern. The intersection of the traces indicators market uncertainty. An extra sign of value development is when each traces are above the zero horizontal line. Conversely, each traces beneath the zero mark verify a downward pattern.

The KST line is yellow, whereas the sign line is blue. Within the first two circumstances, the indicator confirmed a powerful pattern. Each indicator traces rapidly diverged and moved in the identical path. Within the third and fourth circumstances, the divergence of the traces was delayed.

KST indicator indicators:

1. The intersection of the KST and sign traces on the higher or decrease factors offers a sign to open a commerce. When the KST line crosses the sign line from above, a brief place could be thought of, and if the other is true, a protracted place could be opened.

The primary sign is fake: the yellow KST line crosses the sign line from prime to backside, however there is no such thing as a downward pattern. Subsequent indicators confirmed a powerful pattern. The commerce could be opened 2–3 candles after the KST traces cross.

2. Zero line crossing. When the principle line crosses the zero horizontal line, it could actually function an extra affirmation sign. You’ll be able to open trades within the path of the KST traces. Nevertheless, this sign is taken into account weak, so it is best to solely depend on it as a final resort.

3. Bullish and bearish divergence. A divergence between the indicator’s path and the value suggests a potential reversal in direction of the KST line. It’s higher to zoom out on the chart to seek out a number of extremes for drawing the pattern line.

Within the first part of the chart, the KST is rising, confirming the uptrend. Within the second part, the indicator’s highs are reducing, however the value continues to achieve new highs. A bearish divergence emerges, after which the uptrend turns right into a downtrend.

Instance of a buying and selling technique. 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).
• Buying and selling property: main foreign money pairs.

Let’s take the EUR/USD pair for instance. Along with the KST, exponential transferring averages (EMA) with quick and lengthy intervals are used.

Primary sign: three EMAs with quick intervals ought to transfer in the identical path above/beneath the EMA (72).

On the chart above, we will see the next:

1. Three short-term transferring averages and the value are above the long-term transferring common (purple line). The KST is above the zero line, and the principle and sign traces are trending upward. A commerce could be opened on the second candlestick after the short-term EMA crosses the long-term one.

2. There’s a bearish divergence and bearish momentum. The value at level 2 returned to the break-even stage, however a stop-loss was not triggered. The optimum situation is to shut the commerce on the excessive, the place the KST values have already turned down.

3. Shut the commerce if it has not been achieved earlier than. The short-term transferring averages moved down and crossed the EMA(72), whereas the KST values crossed the zero mark and settled beneath it.

Observe the principle precept of the technique: if the KST makes use of and smooths the RoC of various intervals, then pattern indicators must also have completely different intervals to take care of stability.

Conclusion

The KST is a modified model of the RoC momentum indicator that’s much less prone to sharp value swings as a result of it smooths RoC utilizing completely different intervals.

The indicator is much from good, because it generates a comparatively giant variety of false indicators. Nevertheless, these could be filtered out utilizing different technical evaluation instruments, such because the RSI and MACD.

The Know Positive Factor is finest used as an auxiliary instrument to substantiate breakouts of key ranges or pattern reversals.

There isn’t any such factor as an ideal buying and selling instrument, and the KST indicator won’t present 100% correct indicators. You will need to mix it appropriately with different technical indicators, which could be achieved utilizing a method tester. For instance, the built-in MT4 tester or FX Blue, Foreign exchange Simulator. Testing takes time and endurance, however this manner you’ll be able to decrease dangers and achieve invaluable expertise. Good luck buying and selling!