Can you ever really know anything for sure with technical analysis? Most likely not, as there is no strategy or indicator that gives correct signals 100% of the time. That’s the simple truth that every trader knows. Still, Pring’s Know Sure Thing indicator has a promising name which stands out in the long list of technical analysis indicators.
It is true that some indicators work better than others, especially if used correctly, giving more opportunities to take advantage of the market. This indicator with a promising name was developed by a technical analysis expert Martin Pring, who is also the author of the book “Martin Pring’s Complete Guide to Technical Analysis An Indian Perspective”. This momentum indicator has complex calculations which measure price momentum for four different time frames and allows for possibly more accurate measurements and easier interpretation of the signals.
Let’s have a closer look at this indicator and learn how it may be incorporated in trading on various instruments.
What is Pring’s Know Sure Thing?
Pring’s Know Sure Thing (KST) can be used in the same way as many other momentum oscillators, like, for example, the RSI indicator. KST may indicate possible overbought and oversold conditions, as well as potential signals for Buy and Sell entries.
The indicator consists of three lines: the baseline (zero line), the signal line (green) and the KST line (red). The interaction and crossovers between the lines might help traders to better understand the direction where the market is headed.
Pring’s Know Sure Thing Signals
There are several ways of working with this indicator. First of all, traders may look for overbought and oversold conditions of the asset, when the indicator dips well below 0, or rises high above it, forming the support and resistance levels.
Another possible approach is the 0 line crossover. An upward 0 line crossover may be considered as a possibility to enter a “Buy” position. At the same time, a downward crossover of the zero line may signal an opportunity to “Sell”.
One more way of reading the indicator’s signals is to pay attention specifically to the crossovers between the KST (red) and the signal (green) lines. If the KST line goes above the signal line, it may be considered a “Buy” signal. If the KST line crosses below the signal line, it may be considered a “Sell” signal. In the example below, the signals for both “Buy” and “Sell” entries are visible. According to the example, a trader may consider entering a deal and “ride” the trend upwards until the signal to “Sell”, received from KST.
It is up to the trader to choose which one of the three approaches to choose. Each one of them has its advantages and disadvantages, but the ultimate decision completely depends on the trader’s preferences and trading style.
Important to note
The KST indicator is a lagging indicator, which means that the signals received from it might prevent a trader from entering exactly at the moment when a new trend emerges. At the same time, KST might filter out some false signals that other indicators might display, which makes its signals more reliable. However, it does not guarantee a 100% success rate: divergence might still occur even with KST indicator, so implementing appropriate risk management techniques is crucial.
How to set up the Pring’s Know Sure Thing Indicator?
To start using Pring’s Know Sure Thing Indicator and set it up, search for it in the Momentum tab of indicators menu on the IQ Option platform.
This indicator works well with the default settings, so it is possible to leave it as it is. However, experienced traders may change the settings according to their preferences. It is also possible to change the color of the lines, if necessary. Choose the indicator from the menu and press the “Apply” button. The indicator is ready to use!
In order to really master the indicator, it is important to practice and try different variations of assets, timeframes and, perhaps, indicator settings. Use the Practice balance without hesitation and find your preferred way of using the Pring’s Know Sure Thing!
