The Know Sure Thing oscillator shows the momentum of a stock by calculating the simple moving average (SMA) of 4 different rate of change (ROC) periods and adding them up to create a single KST line. Then a signal line is created by taking the 9 SMA of the KST line.
The strategy is to wait for the KST to cross over the signal line for a long position entry, and exit when the KST crosses under the signal line. Flip it around for shorting: enter a short position when the KST crosses under the signal line, and exit when the KST crosses over the signal line.
Know Sure Thing strategy for the SPY on the 15min timeframe
Results
Testing this strategy on the SPY has returned the following profit factors:
- 1min: 1.062
- 5min: 1.082
- 15min: 1.226
- 30min: 1.038
- 1hour: 0.912
- 4hour: 0.833
- 1day: 0.89
- Average: 1.006
This strategy works best on the 15 minute timeframe, and gets worse as the timeframe gets higher. Remember, different ticker symbols can provide different results.
TradingView Script
Try the Know Sure Thing strategy for yourself on TradingView: https://www.tradingview.com/script/bGocChPC-Know-Sure-Thing-backtestx/
Test with your own tickers and timeframes to see how well it works!