1 Introduction. KDJ
The calculation formula of KDJ index is as follows:
RSV= (closing price-lowest price) ÷ (highest price-lowest price) × 100
Among them, the highest price and the lowest price in recent n trading days are given as n-day highs and lows.
Secondly, k is the m-day moving average of RSV, d is the n-day moving average of k, and j is 3K-2D.
The rules of KDJ indicators are as follows:
1. When the value of k is greater than the value of d, the market is beneficial to many parties;
2. When the value of k is less than the value of d, the market has a negative side;
3. When the value of k crosses the value of d from top to bottom, it falls below it, which is a sell signal, and vice versa.
4. When the K value is greater than 80, it is an overbought area, and when the K value is less than 20, it is an oversold area.
The role of 2.2. KDJ
KDJ index is a technical analysis tool to measure the intensity of stock price fluctuation. KDJ is the stochastics obtained by comparing the current stock price with the highest and lowest prices in recent N days. It is mainly used to study the situation of overbought and oversold in the market, and analyze the stock price trend and the strength of trading signals.
Advantages and disadvantages of 3.3. KDJ
When using KDJ indicators, you need to pay attention to the following points:
1.KDJ is sensitive to the analysis of short-term trends, but weak to the analysis of long-term trends;
2. When the stock market is in a volatile state, KDJ will fluctuate greatly, and it is difficult to accurately judge the buying and selling points;
3. In the previous downward trend, the KDJ indicator will always be in the oversold area, and it is difficult to judge the stop loss point.
Application of 4.4. KDJ
KDJ index can be applied to stock, futures and other markets to evaluate the market situation and assist decision-making. In the actual operation process, other technical indicators and related information can be combined to improve the accuracy.