Sidebar: Calculating the KST
The suggested parameters for short, intermediate and long term can be found in sidebar Figure 1. There are three steps to calculating the KST indicator. First, calculate the four different rates of change. Recalling
the formula for rate of change (ROC) is today’s closing
price divided by the closing price n days ago. This result is then multiplied by 100. Then subtract 100 to
obtain a rate of change index that uses zero as the center point. Second, smooth each ROC with either a
simple or exponential moving av-erage (EMA). Third, multiply each smoothed ROC by its prospective weight and sum the weighted smoothed ROCs.