KDJ, also known as stochastics, was first put forward by Dr. George Lane. This is a very novel and practical technical analysis index. It was first used in the analysis of futures market, and then widely used in the short-term trend analysis of stock market. It is the most commonly used technical analysis tool in futures and stock markets.
Application rules of KDJ index
KDJ index is three curves, which are mainly considered from five aspects when applied: the absolute number of KD; The form of KD curve; KD index crossing; Deviation of KD index; The value of the j index.
1. Considering the value of KD. The value range of KD is 0 ~ 100, which is divided into several areas: over 80 is overbought area (the buyer's power is greater than the seller's power [1]).
2. If the values of K, D and J are all greater than 50, it is a bull market and the market outlook is bullish; If the values of k, d and j are less than 50, it is a short market and the market outlook is bearish.
3. Three minutes later. KDJ index diagram, D curve has the slowest running speed and the lowest sensitivity; Followed by K curve, J curve is the most sensitive.
4. When J is greater than K and K is greater than D, that is, the three indicator curves are arranged in a long position, indicating that it is a long market at present; When there is a golden cross in the three indicators, the indicators send a buy signal.
5. When the three indicator curves are arranged in short positions, the short-term trend is downward; When there is a dead fork between the three curves, the indicator sends a sell signal.
6. If the intersection of KD lines fluctuates repeatedly around 50, it means that the market is being sorted out. At this time, it is necessary to observe the dynamics of KD deviation in combination with J value, and then decide the investment action.