Know Sure Thing: four rate-of-change readings in one line

What it measures

The KST sums four smoothed rate-of-change calculations of increasing length, each weighted more heavily than the last.

The idea is that momentum operates on several timescales at once, and a single rate-of-change period is arbitrarily picking one of them.

By weighting the longer periods more, the resulting line trends like a long-term momentum reading while still responding to shorter shifts.

How it is calculated

These are the steps Basis performs, verified against the published definition.

1. 1

   Compute rate of change over four periods, conventionally ten, fifteen, twenty and thirty.

2. 2

   Smooth each with its own moving average, conventionally ten, ten, ten and fifteen.

3. 3

   Multiply them by weights of one, two, three and four respectively and add them together.

4. 4

   The signal line is a nine-period average of the result.

How to read it

• The signal-line crossing is the primary event and is far less frequent than on a single-period oscillator.
• Zero crossings separate a market in long-term positive momentum from one in negative, which is a regime statement.
• Divergence against price is meaningful here because the line is already smoothed across four timeframes and does not wobble.
• The slope matters more than the level; the KST has no fixed bounds.
• The clearest use is as a regime filter on a slower chart while trading a faster one. A weekly KST above zero and rising tells you which direction to take signals in on the daily, which is a job its lag does not interfere with at all.

Where it misleads

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