The KDJ indicator is also called the stochastic indicator

Principle: It uses the relative position of the current stock price in the recent stock price distribution to predict possible trend reversals. It is mainly a technical tool that uses the true amplitude of price fluctuations to reflect the strength of price trends and overbought and oversold phenomena, and sends buy and sell signals before prices rise or fall. It was first used in the analysis of the futures market, and later was widely used in the short- and medium-term trend analysis of the stock market. It is the most commonly used technical analysis tool in the futures and stock markets.

As shown in the picture:

The colors of KDJ indicators in the software: Generally, the K line is white (or yellow), the D line is yellow (or blue), and the J line is purple. Display, the color and parameters of each line can be modified in some software.

KDJ indicator application rules:

KDJ stochastic indicator responds more sensitively and quickly, and is a better technical indicator for short, medium and long-term trend band analysis and judgment.

For those who make large funds and large bands, generally when the KDJ value of the month is at a low level, they gradually enter the market to absorb; the daily KDJ is extremely sensitive to the direction of stock price changes, and is an important method for daily trading in and out; for doing For short-term investors with small bands, the 30-minute and 60-minute KDJ are important reference indicators; for investors who have set a trading plan and are ready to place orders, the 5-minute and 15-minute KDJ can provide the best entry and exit times.

The commonly used default parameter of KDJ is 9. From the perspective of usage experience, the short-term parameter can be changed to 5, which will not only respond more quickly and accurately, but also reduce the passivation phenomenon. The commonly used KDJ parameters are: 5, 9, 19, 36, 45, 73, etc. In actual combat, different cycles should be analyzed comprehensively, and the short, medium and long-term trends will be clear at a glance. If there are oscillations in different cycles, it means that the trend is more reliable.

Principles for practical research and judgment of KDJ indicators:

1. The K line is a quick confirmation line - a value above 90 is overbought, and a value below 10 is oversold;

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2. Line D is a slow trunk line - a value above 80 is overbought, a value below 20 is oversold;

3. Line J is a direction-sensitive line. When J If the value is greater than 100, especially for more than 5 consecutive days, the stock price will form at least a short-term top. On the contrary, when the J value is less than 0, especially for more than several consecutive days, the stock price will form at least a short-term bottom.

(1) When the K value gradually becomes larger than the D value, the graph shows that the K line crosses the D line from below, indicating that the current trend is upward, so the K line breaks through D upward on the graph. When the line is above the line, it is a buying signal.

In actual combat, when the K and D lines cross upward below 20, the short-term buying signal at this time is more accurate; if the K value is below 50, if the K value crosses the D value twice in succession from bottom to top, When a "W bottom" pattern is formed with the right bottom higher than the left bottom, the stock price may rise considerably in the future.

(2) When the K value gradually becomes smaller than the D value from a larger value, the K line on the graph will cross the D line from above, indicating that the current trend is downward, so the K line on the graph will go downwards. When it breaks through the D line, it is a sell signal.

In actual combat, when the K and D lines cross downward above 80, the short-term selling signal is more accurate at this time; if the K value is above 50, it crosses the D value twice in succession from top to bottom. , when forming an "M head" pattern with the right head lower than the left head, the stock price may fall considerably in the future.

(3) It is also a very practical method to judge the top and bottom of the stock price through the divergence between KDJ and stock price:

A. The stock price reaches a new high, but the KD value does not reach a new high, which is If it is a divergence from the top, you should sell;

B. The stock price has reached a new low, but the KD value has not reached a new low. It is a divergence from the bottom, and you should buy;

C. The stock price has not reached a new high, but the KD value has not reached a new low. The KD value hits a new high, which is a divergence from the top, and you should sell;

D. The stock price does not hit a new low, but the KD value hits a new low, which is a divergence from the bottom, and you should buy.

It should be noted that the method of determining the KDJ top-bottom divergence can only be compared with the KD value at the high and low points of the previous wave, and cannot be compared by jumping over it.

Some experience in application:

1. In actual operation, some short-term traders often use minute indicators to judge the market outlook and determine the timing of buying and selling, which is commonly used in the T+0 era. 15-minute and 30-minute KDJ indicators. In the T+1 era, 30-minute and 60-minute KDJ are often used to guide entry and exit. Several empirical rules are summarized as follows:

① If the 30-minute KDJ consolidates below 20 for a long time, and the same is true for the 60-minute KDJ, once the 30-minute K value crosses the D value and crosses 20, it may trigger a trend. This is a rebound market that lasts for more than 2 days; if the daily KDJ indicator also occurs a golden cross at a low level, it may be an intermediate market.

However, it should be noted that after the golden cross between the K value and the D value, this crossover will be effective only when the K value is greater than the D value by more than 20%;

② If KDJ turns downward above 80 in 30 minutes, the K value crosses downwards The D value has fallen below 80, and the 60-minute KDJ has just crossed 20 and is less than 50, which means that the market will retrace its steps. After the 30-minute KDJ hits the bottom, it may continue to rise;

③ If the 30-minute and If the 60-minute KDJ is above 80, and after a long period of consolidation, the K value crosses the D value downward at the same time, it indicates that a downward adjustment for at least 2 days will begin;

④ If the 30-minute KDJ falls below 20 U-turn upward, and the 60-minute KDJ is still above 50, you need to observe whether the 60-minute K value will effectively cross the D value (the K value is greater than the D value by 20%). If it is effective, it means that a new upward attack will start; if it is invalid, It indicates that it is only a rebound during the decline, and will continue to fall after the rebound;

⑤ If the 30-minute KDJ stops falling before 50, and the 60-minute KDJ has just crossed upward, it means that the market may continue Up, it is currently only a retracement;

⑥ The 30-minute or 60-minute KDJ divergence phenomenon can also be used as a basis for judging the top and bottom of the market. For details, see the previous discussion of daily divergence;

⑦ In a super strong market, the 30-minute KDJ can reach more than 90, and invalid crossovers occur repeatedly at high levels. At this time, focus on the 60-minute KDJ. When the 60-minute KDJ crosses downward, it may trigger a short-term deeper trend. Retracement;

⑧ During the plummeting process, the 30-minute KDJ can be close to the 0 value, but the general trend is still falling. At this time, you should also look at the 60-minute KDJ. When the 60-minute KDJ has an effective crossover upward, it will Triggered a strong rebound.

2. When the market is in an extremely strong or extremely weak unilateral market, and the daily KDJ is repeatedly passivated, medium and long-term indicators such as MACD should be used instead; when the stock price fluctuates violently in the short term and the daily KDJ response lags behind, the medium and long-term indicators such as MACD should be used instead. Use CCI, ROC and other indicators instead; or use the SLOWKD slow indicator;

3. KDJ parameters in the weekly line generally use 5. The bottom and top of the weekly KDJ indicator have obvious prompting effects. According to This band operation can save you a lot of hard work and strive to maximize profits. It should be noted that generally the weekly J value rises in the oversold zone with a V-shaped single bottom, indicating that it is only a rebound market and the formation of a double bottom is a reliable intermediate market; but the J value There is also the possibility of a sharp decline at a single top in the overbought zone, so we should be more vigilant. At this time, we should combine other indicators for comprehensive analysis; but when the stock market is in a bull market, after the J value is in the overbought zone for a period of time, the stock price will still rise significantly.

KDJ indicator stock selection method

To make money in the stock market, you must first do a good job of stock selection.

The daily KDJ is a sensitive indicator that changes rapidly and is highly random. False buy and sell signals often occur, leaving investors at a loss when buying and selling based on the buy and sell signals it sends. Using weekly KDJ and daily KDJ*** with the golden cross stock selection method, you can filter out false buy signals and find high-quality successful buy signals.

Weekly KDJ and daily KDJ*** are the same as the golden cross stock selection method. The buying point options can be as follows:

The first buying method: buy in advance Enter the law.

In actual operations, we often encounter this problem: since the daily KDJ changes faster than the weekly KDJ, when the weekly KDJ golden cross, the daily KDJ has already golden cross several days in advance. The stock price has also risen for a while, and the buying cost has increased. Aggressive investors can buy in advance to reduce costs.

The conditions to be met when using the advance buying method are:

① Close the weekly Yang line, and the weekly K and J lines will hook upward and will reach a golden cross (not a golden cross).

② The daily KDJ issues a golden cross within this week, and the golden cross has a positive daily closing and volume volume (if the daily KDJ golden cross is on the day, the trading volume is better than the 5-day average volume.)

The third buying method: the weekly K and D two-line "checkmate" buying method.

This method must meet the following conditions

① After the weekly KDJ golden cross, the stock price retreats to close the weekly negative line, and then resumes its upward trend with heavy volume.

② The weekly K and D lines are about to cross, but the cross does not actually occur, and the K line opens upward again.

③ Daily KDJ golden cross.

Using this method to buy stocks can capture rapid and strong rising prices.

RSV is the abbreviation of English Raw Stochastic Value, which means immature random value in Chinese. It is a concept in stocks. The RSV indicator is mainly used to analyze whether the market is in an "overbought" or "oversold" state: when RSV is higher than 80%, the market is overbought, and the market is about to peak, and exiting the position should be considered; when RSV is lower than 20%, the market is overbought. The market is oversold and the market is about to bottom out. At this time, you can consider adding positions. Formula function RSV:=(CLOSE-LLV(LOW,N))/(HHV(HIGH,N)-LLV(LOW,N))*100; Take the 9-day KD line as an example.

First, the RSV value of the last 9 days must be calculated, that is, the immature random value. The calculation formula is 9-day RSV = (the closing price of the day - the lowest price in the 9 days) ÷ (the highest price in the 9 days - the lowest price in the 9 days) ×100 (the calculated value is the RSV of the day)