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Technical Analysis Explained, Fifth Edition: The Successful Investor's Guide to Spotting Investment Trends and Turning Points, 5th Edition by Martin J. Pring

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15 MOMENTUM III: INDIVIDUAL INDICATORS

Summed ROC: “Know Sure Thing” (KST)

The Long-Term KST

We are going to start off this KST explanation by discussing an indicator suitable for price swings associated with primary trends or those that revolve around the so-called 4-year business cycle, subsequently turning to its application for intermediate- and short-term trends.

Chapter 13 explained that rate of change (ROC) measures the speed of an advance or decline over a specific time span, and is calculated by dividing the price in the current period by the price N periods ago. The longer the time span under consideration, the greater the significance of the trend being measured. Movements in a 10-day ROC are far less meaningful than those calculated ...

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