Expert Chaslau Koniukh
  • Companies
  • Global investment
  • Investors
  • Terminology
  • Economy
  • Stock Market
  • World exchanges
  • Tech and Marketing
KST indicator
Market terminology

Features of using the KST indicator for stock trading

10.07.2023
2 min read

Advantages and disadvantages of the KST indicator

KST belongs to the group of technical analysis indicators. It was developed by trader Martin J. Pring, the author of the Price Action theory. The tool is based on the RoC indicator, which helps to determine the rate of change in a particular price over a given period. The indicator can be used to analyze trends in the market and track trade signals. However, RoC, like most oscillators of this group, is characterized by the presence of noise, which reduces the accuracy of the analysis. When developing his own indicator, Pring has reduced their influence and strengthened the advantages of RoC, so KST allows you to:
– track trends in both the short and long term;
– reduce noise by using moving averages;
– account for growth in each indicator when calculating.
KST is calculated using a weighted average formula, where each RoC indicator is given its own weight. The longer the calculation period, the more weight is assigned to the indicator. This approach makes KST a classic oscillator. However, in this case, the moving average is added to the calculation, which serves as a signal line designed to soften the critical set of values.KST stock indicatorTo set up the indicator, you need to enter 13 parameters, including the price at which the analysis is carried out, the periods for the RoC and EMA indicators, and the weights for the RoC. In this case, it is essential to choose the correct periods for RoC. In addition, the longer the period for EMA, the less influence of noise. The scales also exert pressure on the period of trends: short-term or long-term.
An increase in the baseline or signal line indicates an upward trend in the market. A decrease in the main line indicates a downtrend. If the main line does not reach the signal height, it is possible to talk about the growth of asset prices. Otherwise, the quotes decrease. And such a chart is possible both under the influence of a trend and during a correction.
Determining the market phase depends on the position of the main line. If the line is above the crossover, the trend is upward. If below, it is downward.
You can buy the asset when the main line crosses the signal line from bottom to top. A connection from top to bottom signals a sale. A crossover with the main line in a top-down position indicates an entry into a short position. If the opposite is true, an entry into a long position. Graphic patterns can form on the KST, such as a breakout, bottom, or resistance level. However, their use depends on the trader and his analysis approach.
Despite several advantages of the indicator, it also has disadvantages. One of them, traders name the delay in signal appearance caused by using moving averages. In addition, KST can hardly be called a universal and convenient tool.

Tags: Market terminology
0
Previous Post Apple plans to expand film production Next Post Pagani: the Italian hypercar manufacturer

You Might Also Like

allocation types
Market terminology
Allocation: definition of the concept for the financial sector
22.07.2024
soft market
Market terminology
Soft market: its impact on sellers and buyers
31.01.2023
intraday trading
Market terminology
Intraday trading: basic approaches for trader activity
04.12.2020
leverage
Market terminology
What a broker’s leverage means: the essence of the term
16.08.2020
patterns on the stock exchange-2
Market terminology
Patterns in the stock market: what shapes are used in technical analysis
07.02.2022
credit risk
Market terminology
Credit risk: how to assess the probability of loss in advance
14.12.2022

Popular Posts

  • Ingeborg Mootz: a woman who became a stock player at the age of 75
  • Analysts: Egypt’s economy to continue falling in 2023
  • Businessman Chuck Feeney: the man who gave the world Duty Free
  • Field of activity of the American Monsanto Company Corporation

Editor's Picks

Chaslau Koniukh
Analytics

American bankers from JPMorgan and Goldman Sachs advise to invest in gold: review by Chaslau Koniukh.

Press Secretary
17.08.2020
Expert Chaslau Koniukh
Analytics

Chaslau Koniukh on the analysts’ opinion on the key stake size change soon

Press Secretary
18.06.2020
expert Chaslau Koniukh
Analytics

Chaslau Koniukh: Internet trade market in Russia may reach 2.78 trillion rubles.

Press Secretary
30.05.2020
Will the U.S. oil shale industry be able to quickly recover from the crisis: A Review by Chaslau Koniukh
Analytics

Will the U.S. oil shale industry be able to quickly recover from the crisis: A Review by Chaslau Koniukh

Press Secretary
16.05.2020

Popular Posts

  • Ingeborg Mootz: a woman who became a stock player at the age of 75
  • Analysts: Egypt’s economy to continue falling in 2023
  • Businessman Chuck Feeney: the man who gave the world Duty Free
  • Field of activity of the American Monsanto Company Corporation
  • Spain’s economy performs best in the EU
Expert Chaslau Koniukh
  • Facebook
  • Twitter
  • Instagram

© 2024 CHASLAU KONIUKH. ALL RIGHTS RESERVED. Expert in marketing and project management, international investments, financial analyst.

Menu

  • Biography
  • Companies and corporations
  • Global investment
  • Investors and Entrepreneurs
  • Economy
  • Market terminology
  • Stock Market
  • World exchanges
  • Tech and Marketing
  • Analytics