Know Sure Things is a kind of crossover momentum oscillator indicator.

Being a crossover momentum oscillator indicator, Know Sure Thing indicator was created by Martin Pring with the main objective of helping traders to know the direction of the market as well as whether the market is in an overbought or oversold condition.

Since Know sure thing is a momentum crossover oscillator it is therefore based on smoothed rate of change with an oscillation at point 0.As a crossover indicator, Know Sure Thing has two crossover lines, the blue line which represents the Know Sure Thing and the red line which represents the signal line.

According to Martin Pring, the values of know sure thing indicator is derived based on four different timeframes as follows;

-Taking the simple moving average(SMA) or rate of change (ROC) of four different period as follows

ROCSMA1= 10 period SMA of 10 period ROC

ROCSMA2= 10 period SMA of 15 period ROC

ROCSMA3= 10 period SMA of 20 period ROC

ROCSMA4 = 10 period SMA of 30 period ROC

The four are then added together to give the know sure thing (KST) as follows;

KST= (ROCSMA1*1)+(ROCSMA2*1)+(ROCSMA3*1)+(ROCSMA4*1)

Therefore, since know sure thing is based on overbought and oversold in the market as well as divergence,the direction of the market is explained as follows;

Concept of crossover

Since Know sure thing is based on crossover of overbought and oversold in the market, it therefore has two crossover lines;the know sure thing(KST) which is blue in color and the signal line which is red in color.When the know sure thing(KST) line crosses above the signal line at below 0 oscillation point,that will be an indication of an oversold market at that point thus the traders should close any sell position and open a buy position since the market will start moving upwards at that point.On the other hand,if the know sure thing(KST) line crosses below the signal line at above 0 oscillation point,that will be an indication of an overbought market at that point thus the traders should close any buy position and open a sell position since the market will start moving downwards.This is indicated as from the candle sticks chart below;

From the candle sticks chart above,there are 4 points,point A,B,C and D. Point A is an overbought market while point B is an oversold market.Point C which is blue in color represents the know sure thing(KST) while point D which is red in color represents the singal line.At point A,the know sure thing(KST) has crossed below the signal line at above 0 oscillation point thus an indication of an overbought market at that point.This will signal the trader to close any buy position and open a sell position since the market is starting to move downwards.On the other hand,at point B,the know sure thing(KST) has crossed above the signal line thus an indication of an oversold market at that point.This will signal the trader to close any sell position and open a buy position since the market is starting to move upwards.

Concept of divergence

Using the concept of divergence, if the two crossover lines are moving downwards while the market is moving upward, the market will reverse and start moving downwards in the same direction as the two crossover lines thus signaling traders to be trading downwards while when the two crossover lines are moving upward while the market is moving downward, the market will reverse and start moving upward in the same direction as the two signal lines thus signaling traders to be trading in an upward market direction. This is indicated as from the candlesticks chart below;

From the candlesticks chart above, there are two points, A and B. At point A the market was moving upward while the know sure things and signal lines were in an upward market direction.The market then reverse and start moving in the same direction downwards as the know sure thing and the signal line. On the other hand, at point B the market was moving downwards while the know sure thing and the signal line was moving upward. The market then reverse and start moving upward in the same direction as the know sure thing and the signal line.

Recommendation: If you are a day trader just use 1 min,5 min,15 min and 30 min timeframe while if you are a swing trader just use 1 hour and above timeframe if you want know sure thing indicator to work well for you.

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