Principle: It is to use the relative position of the current stock price in the recent stock price distribution to predict the possible trend reversal. It is a technical tool that mainly uses the real amplitude of price fluctuation to reflect the strength of price trend and the phenomenon of overbought and oversold, and sends out buying and selling signals before the price rises or falls. 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.

As shown in the figure:

The color of KDJ indicator in the software: generally, K line is white (or yellow), D line is yellow (or blue), and J line is purple to display. In some software, the color and parameters of each line can be modified.

Key points of KDJ index application:

KDJ stochastic index is sensitive and fast, which is a good technical index for short-term, medium-term and long-term trend band analysis.

For people who make a lot of money in large bands, generally, the KDJ value of the month gradually enters the market when it is low; Daily KDJ is extremely sensitive to the direction of stock price changes and is an important method of daily trading. For short-term travelers in small bands, 30 minutes and 60 minutes KDJ are important reference indicators; For investors who have an order plan, 5 minutes and 15 minutes KDJ can provide the best entry time.

The default parameter commonly used in KDJ is 9. From the experience, the short-term parameter can be changed to 5, which not only makes the response more agile, fast and accurate, but also reduces the passivation phenomenon. Commonly used KDJ parameters are 5, 9, 19, 36, 45, 73, etc. In actual combat, different periods should also be comprehensively analyzed, and the short, medium and long trends should be clear at a glance. If * * * vibration occurs in different periods, the reliability of the trend will increase.

Essentials of actual combat judgment of KDJ indicators:

1 and K-line are quick confirmation lines-values above 90 are overbought and values below 10 are oversold;

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

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

(1) When the value of k is gradually greater than the value of d, the graph shows that the K line crosses the D line from below, indicating that the current trend is upward, so when the K line crosses the D line graphically, it is a buy signal.

In actual combat, when the K line and the D line cross below 20, the signal of short-term buying is more accurate at this time; If the K value is below 50, the D value crosses from bottom to top twice, forming a "W bottom" shape with the right bottom higher than the left bottom, and the stock price may have a considerable increase in the afternoon.

(2) When the value of k is gradually less than the value of d, the graph shows that the K line crosses the D line from above, indicating that the current trend is downward, so when the K line crosses the D line downward in the graph, it is a signal to sell.

In actual combat, when the K line and the D line cross downward above 80, the short-term selling signal at this time is more accurate; If the value of K is above 50 and the value of D breaks down from top to bottom twice, forming an "M-head" shape with the right head lower than the left head, the stock price may drop considerably in the afternoon.

(3) It is also a practical method to judge the top and bottom of the stock price by the trend of KDJ deviating from the stock price:

A, the stock price hit a new high, but the KD value did not hit a new high, which belongs to the top deviation and should be sold;

B, the stock price is low, but the KD value is not low, which belongs to the bottom deviation and should be bought;

C, the stock price has not reached a new high, but the KD value has reached a new high, which belongs to the top deviation and should be sold;

D, the stock price is not low, but the KD value is low, which belongs to the bottom deviation and should be bought.

It should be noted that the method of judging the deviation between the top and bottom of KDJ can only be compared with the KD value of the previous wave of high and low points, and can not be compared by jumping over.

Some experiences in application:

1. In practice, some short-term, flat and fast short-term customers often use the minute indicator to judge the market outlook and decide the trading opportunity. In T+0 era, 15 minutes and 30 minutes KDJ indicators are commonly used, and in T+ 1 era, 30 minutes and 60 minutes KDJ are used to guide entry and exit. Several rules of thumb are summarized as follows:

① If KDJ consolidates below 20 for a long time within 30 minutes, so does KDJ within 60 minutes. Once the K value crosses the D value and crosses 20 within 30 minutes, it may trigger a rebound lasting for more than 2 days; If the daily KDJ indicator is also at a low level, it may be an intermediate market. However, it should be noted that it is only effective when the K value is greater than 20% of the D value after the intersection of the K value and the D value.

② If KDJ turns head down above 80 in 30 minutes, K wears D below 80, and KDJ just passes 20 and is less than 50 in 60 minutes, indicating that the market will turn head back, and KDJ may continue to rise after bottoming out in 30 minutes;

(3) If KDJ is above 80 in 30 minutes and 60 minutes, after a long period of consolidation, the value of K will cross the value of D at the same time, which means that downward adjustment should be started for at least 2 days;

(4) If KDJ falls below 20 in 30 minutes and turns upward, and KDJ is still above 50 in 60 minutes, it is necessary to observe whether the K value will effectively cross the D value within 60 minutes (the K value is greater than 20% of the D value), and if it is effective, start a new round of upswing; If it is invalid, it means that it is only a rebound in the process of falling, and it will continue to fall after the rebound;

⑤ If KDJ stops falling before 50 in 30 minutes, KDJ just crosses upward in 60 minutes, indicating that the market may continue to rise again, and it is only retracing at present;

6. The deviation of KDJ in 30 minutes or 60 minutes can also be used as the basis for judging the top and bottom of the market. For details, please refer to the previous discussion on daily deviation;

⑦ In the super-strong market, the KDJ can reach more than 90 in 30 minutes, and the high position repeatedly appears invalid crossover. At this point, the focus of 60 minutes is KDJ. When KDJ crosses down in 60 minutes, it may lead to a short-term deep retreat;

⑧ During the plunge, the KDJ can be close to 0 in 30 minutes, but the general trend is still declining. At this time, we should also look at KDJ in 60 Minutes. When KDJ effectively crosses upward within 60 minutes, it will trigger a strong rebound.

Second, when the market is in a very strong and weak unilateral market, the daily KDJ is repeatedly passivated, and the medium and long-term indicators such as MACD should be used instead; When the stock price fluctuates greatly in the short term and the daily KDJ response lags behind, CCI, ROC and other indicators should be used instead; Or use SLOWKD slow indicator;

Third, the weekly KDJ parameter is generally 5, and the weekly KDJ index has obvious hints for bottoming out and peaking. Accordingly, band operation can save a lot of hard work and strive for maximum profit. Need to be reminded that the weekly J value generally rises in the V-shaped single bottom of the oversold area, indicating that it is only a rebound market, and the formation of a double bottom is a reliable intermediate market; However, the J value may drop sharply at the top of the overbought area. At this time, we should be vigilant and judge comprehensively with other indicators. However, when the stock market is in a bull market, the stock price will still rise sharply after the J value is overbought for a period of time.

Stock selection method of KDJ index

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

Daily KDJ is a sensitive index, which changes quickly and has strong randomness. False trading signals often occur, which makes investors feel at a loss when buying and selling according to the trading signals they send. Using the same golden cross stock selection method as that of KDJ in Zhou and KDJ in Japan, false buying signals can be filtered out and high-quality successful buying signals can be found.

Weekly KDJ and daily KDJ*** can be selected by the golden cross stock selection method as follows:

The first purchase method: purchase in advance.

In practice, we often encounter such a problem: because the daily KDJ changes faster than the weekly KDJ, when the weekly KDJ crosses the gold fork, the daily KDJ has crossed the gold fork several days earlier, the stock price has also risen by one cycle, and the buying cost has increased. Aggressive investors can buy in advance to reduce costs.

The pre-purchase method needs to meet the following conditions:

(1) Close the Zhouyang line, and the hooks of Zhouyang K and J will go up with a golden fork (not a golden fork).

② The daily KDJ issued gold forks this week, and the daily trading volume of gold forks was positive (if the daily KDJ gold forks were on the same day, it is better that the trading volume is greater than the 5-day average. )

The second buying method: the weekly KDJ is only a golden fork, and the daily KDJ has a golden fork buying method.

The third buying method: weekly K-line and D-line "dying" buying method.

This method should meet the following conditions

(1) After the weekly KDJ gold fork, the stock price returned to the weekly negative line and then went up again.

② K-line and D-line will die, but there is no real dead fork, and K-line will open its mouth again.

3 daily KDJ gold fork.

Buying stocks in this way can capture the rapid and strong rising market.