the principle and calculation method of KDJ indicator
I. the principle of KDJ indicator
the stochastic indicator kdj generally calculates the immature random value RSV of the last calculation period according to the statistical principle, through the highest price, the lowest price and the closing price of the last calculation period in a specific period (usually 9 days, 9 weeks, etc.) and the proportional relationship among them, and then calculates K according to smma's method.
stochastic indicator KDJ is a point formed by calculating the highest price, lowest price and closing price, and the obtained k value, d value and j value are respectively on the coordinate of the indicator, and countless such points are connected to form a complete KDJ indicator that can reflect the price fluctuation trend. It is a technical tool that mainly uses the real amplitude of price fluctuation to reflect the strength of price trend and overbought and oversold phenomenon, and signals buying and selling before the price has risen or fallen. In the design process, it mainly studies the relationship between the highest price, the lowest price and the closing price, and also integrates some advantages of momentum concept, strength index and moving average, so it can judge the market quickly, quickly and intuitively.
the stochastic indicator KDJ first appeared in the form of KD indicator, which was developed on the basis of William indicator. However, William indicator only judges the phenomenon of overbought and oversold of stocks, while KDJ indicator integrates the concept of moving average speed to form a more accurate basis for buying and selling signals. In practice, K-line and D-line cooperate with J-line to form KDJ index. Because KDJ line is essentially a concept of random fluctuation, it is more accurate for grasping the short-term market trend.
second, the calculation method of KDJ indicator
the calculation of indicator KDJ is complicated. First, the RSV value of the period (n days, n weeks, etc.), that is, the immature random indicator value, is calculated, and then the K value, D value, J value, etc. are calculated. Take the calculation of daily KDJ value as an example, the calculation formula is
n-day RSV = (Cn-LN) ÷ (HN-LN) × 1
, where CN is the closing price on the nth day; Ln is the lowest price in n days; Hn is the highest price in n days. The RSV value always fluctuates between 1 and 1.
Secondly, calculate the K value and D value:
K value of the current day =2/3× K value of the previous day+1/3× RSV
D value of the current day =2/3× D value of the previous day+1/3× K value of the current day
If there is no K value and D value of the previous day, it can be replaced by 5 respectively.
take the KD line with a period of 9 days as an example. Firstly, the RSV value of the last 9 days, that is, the immature random value, must be calculated, and the calculation formula is
RSV on the 9th day = (c-L9) ÷ (H9-L9) × 1
, where c is the closing price on the 9th day; L9 is the lowest price within 9 days; H9 is the highest price within 9 days.
K value =2/3× k value of the previous day+1/3× RSV value of the current day
d value =2/3× k value of the previous day+1/3× k plant of the current day
If there is no k value and d value of the previous day, it can be replaced by 5 respectively.
J value =3* k value of the day -2* d value of the day
Third, application principles:
KDJ stochastic indicator is sensitive and quick to respond, and it is a better technical indicator for short, medium and long-term trend band analysis and judgment. Generally speaking, for people with large funds and large bands, the KDJ value of the month is gradually absorbed when it is low; When the main force usually operates, it focuses on the position of weekly KDJ, and makes a judgment on the cycle high and low points of the mid-line band, so it often appears that the daily KDJ is repeatedly passivated unilaterally; Daily KDJ is extremely sensitive to the direction of stock price changes and is an important method for daily trading. For short-term travelers with small bands, 3 minutes and 6 minutes KDJ are important reference indicators; For investors who have specified the trading plan to place an order immediately, 5 minutes and 15 minutes KDJ can provide the best access time.
the default parameter commonly used in KDJ is 9. as far as my personal experience is concerned, the short-term parameter can be changed to 5, which not only makes the response more agile, rapid 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 will be clear at a glance. If there is a phenomenon of * * * vibration in different periods, the reliability of the trend will increase. There are four main points in the actual judgment of KDJ indicators:
1) K line is a quick confirmation line-a value above 9 is overbought, and a value below 1 is oversold;
Line D is a slow trunk line-a value above 8 is overbought, and a value below 2 is oversold;
the j-line is a direction-sensitive line. when the j-value is greater than 1, especially for more than 5 consecutive days, the stock price will at least form a short-term head, whereas when the j-value is less than , especially for more than several consecutive days, the stock price will at least form a short-term bottom.
2) 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 on the graph, it is a buy signal.
In actual combat, when the K and D lines cross upward below 2, the short-term buying signal at this time is more accurate; If the value of K is below 5, and the value of D is crossed twice from bottom to top, forming a "W-bottom" shape with the right bottom higher than the left bottom, the stock price in the afternoon may have a considerable increase.
3) when the value of k is gradually smaller than the value of d, the graph shows that the K-line crosses the D-line from above, which shows that the current trend is downward, so when the K-line crosses the D-line downward on the graph, it is a sell signal.
In actual combat, when the K and D lines cross downward above 8, the short-term selling signal at this time is more accurate; If the value of K is above 5, and the value of D is penetrated twice from top to bottom, forming an "M-head" shape with the right head lower than the left head, the stock price in the afternoon may have a considerable decline.
4) It is also a practical method to judge the top and bottom of the stock price through the trend of KDJ deviating from the stock price: a) The stock price has reached a new high, but the KD value has not reached a new high, which is a top deviation and should be sold; B) the stock price is low, but the KD value is not low, which is a 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 is a top deviation and should be sold; D) the stock price is not low, but the KD value is low, which is a bottom deviation and should be bought;
It should be noted that the method for judging the deviation between the top and bottom of KDJ can only be compared with the KD value at the high and low points of the previous wave, and can't be compared by skipping.
Fourth, application experience:
1) In practice, some short-term customers who are short, flat and quick often use minute indicators to judge the market outlook and decide the trading opportunity. In the T+ era, 15-minute and 3-minute KDJ indicators are commonly used, and in the T+1 era, 3-minute and 6-minute KDJ indicators are often used to guide entry and exit. Several empirical rules are summarized as follows:
A) If the KDJ is consolidated below 2 for a long time in 3 minutes, so is the KDJ in 6 minutes, once the K value crosses the D value and crosses 2 in 3 minutes, it may trigger a rally that lasts 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 only when the K value is more than 2% of the D value after the golden cross between the K value and the D value is effective;
B) If KDJ turns around above 8 in 3 minutes, the K value goes below D value and falls below 8, but KDJ just crosses 2 and is less than 5 in 6 minutes, it means that the market will turn back, and after KDJ bottoms out in 3 minutes, it may continue to rise;
C) If the KDJ is above 8 in 3 minutes and 6 minutes, and the K value crosses the D value at the same time after a long period of consolidation, it indicates that it is necessary to start a downward adjustment market for at least 2 days;
D) If the KDJ falls below 2 in 3 minutes and turns upward, but it is still above 5 in 6 minutes, it is necessary to observe whether the K value will effectively cross the D value in 6 minutes (the K value is more than 2% of the D value), and if it is effective, it indicates that a new round of upswing will be started; 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;
E) if KDJ stops falling before 5 in 3 minutes, and KDJ just crosses upward in 6 minutes, it means that the market may continue to rise again, and it is only a retracement at present;
f) KDJ deviates in 3 minutes or 6 minutes, which can also be used as the basis for judging the top and bottom of the market. For details, see the previous discussion on daily deviation;
G) In a super-strong market, the KDJ can reach more than 9 in 3 minutes, and the invalid crossover occurs repeatedly at the high position. At this time, we should focus on the 6-minute KDJ. When the KDJ crosses downward in 6 minutes, it may lead to a deep short-term retracement;
H) In the process of plunge, KDJ can approach in 3 minutes, but the general trend is still declining. At this time, we should also look at KDJ in 6 minutes. When KDJ crosses effectively in 6 minutes, it will trigger a strong rebound.
2) When the market is in a very strong and weak unilateral market, the daily KDJ is repeatedly passivated, and the medium and long indicators such as MACD should be used instead; When the stock price fluctuates sharply in the short term and the daily KDJ response lags behind, CCI, ROC and other indicators should be used instead; Or use the SLOWKD slow indicator;
3) The weekly KDJ parameter is generally 5, and the weekly KDJ index has obvious prompt function for bottoming out and peaking. According to this, the band operation can save a lot of hard work and strive for profit maximization. It should be noted that the weekly J value generally rises in the V-shaped single bottom in the oversold area, indicating that it is only a rebound market and a double bottom is a reliable intermediate market; However, there is a possibility that the J value will drop sharply at the top of the overbought area, so we should be vigilant and make a comprehensive judgment with other indicators at this time; However, when the stock market is in a bull market, the stock price will still rise sharply after the J value has been overbought for a period of time.
KDJ index stock selection method
To make money in the stock market, we must first do a good job in stock selection. How can I choose a good stock? To sum up, there are six aspects, namely: shape, moving average, technical indicators, turnover, hot spots and main cost. In this issue, let's talk about the weekly KDJ and the daily KDJ*** with the golden fork stock selection method.
daily KDJ is a sensitive indicator, which changes rapidly and has strong randomness. False buying and selling signals often occur, which makes investors feel at a loss when buying and selling according to the trading signals sent by it. Using weekly KDJ and daily KDJ*** the same golden cross stock selection method, we can filter out false buying signals and find high-quality successful buying signals.
The weekly KDJ and the daily KDJ*** have the following options for buying points:
The first buying method: the advance buying method.
In actual operation, we often encounter such a problem: because the daily line KDJ changes faster than the weekly line KDJ, when the weekly line KDJ crosses gold, the daily line KDJ has crossed gold several days in advance, the stock price has also risen by a period, and the buying cost has been raised. Aggressive investors can buy in advance in order to reduce costs.
the conditions to be met in advance buying method are as follows: ① the Zhouyang line is closed, and the hooks of the weekly lines K and J will be crossed (not crossed). ② The daily KDJ develops the golden fork in this week, and the daily collection volume of the golden fork is positive (if the daily KDJ golden fork is on the same day, it is better that the daily turnover is greater than the average of 5 days. )
the second buying method: weekly KDJ is just a gold fork, and daily KDJ is already a gold fork.
the third buying method: the weekly line K and D "will not die" buying method.
The conditions to be met by this method are as follows: ① After the weekly KDJ gold fork, the stock price returns to the weekly yinxian line, and then the volume rises again. ② The weekly K and D lines will be dead-forked, but there is no real dead-forked, and the K line will open its mouth again. 3 daily KDJ gold fork. Buying stocks in this way can capture the fast and strong rising market.
the colors of p>KDJ indicators in various softwares: k line is white, d line is yellow, and j line is purple.