The KDJ indicator, also called the stochastic indicator, is a fairly new and practical technical analysis indicator. 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 a futures and the most commonly used technical analysis tools in the stock market.

Application rules:

The KDJ indicator is three curves. When applying, it is mainly considered from five aspects: the absolute number of the KD value; the shape of the KD curve; the KD indicator Crossover; divergence of KD indicator; value of J indicator.

Analysis of KDJ indicator:

The first aspect is the deviation of KD indicator. When KD is at a high or low level, if there is a deviation from the stock price trend, it is a signal to take action.

Second aspect, the value of J indicator exceeds 100 and is lower than 0, which belongs to the abnormal area of ??price. Greater than 100 means overbought, and less than 0 means oversold.

The third aspect is the value of KD. The unified value range of KD is 0 to 100. We can divide it into three areas: above 80 is the overbought area, below 20 is the oversold area, and the rest are wandering areas. However, stock investors need to pay attention here that this division is only a signal prompt and cannot be completely operated according to this analysis method.

The fourth aspect is the intersection of KD indicators. The relationship between K and D is just like the relationship between stock price and MA. There are also issues of death cross and golden cross.

The fifth aspect is the shape of the KD indicator curve. When the KD indicator forms a head-and-shoulders pattern and multiple tops (bottoms) at a higher or lower position, it is a signal to take action. Stock investors here also need to pay attention to the fact that these forms must appear at a higher or lower position. The higher or lower the position, the more reliable the conclusion.

MACD-Smoothed Moving Average

MACD is a technical tool developed based on the advantages of moving averages. MACD absorbs the advantages of moving averages. Using moving averages to judge buying and selling opportunities is very effective when the trend is obvious. However, if you encounter a bullish consolidation market, the signals sent out will be frequent and inaccurate. The MACD developed based on the moving average principle can, on the one hand, eliminate the frequent false signal defects of the moving average, and on the other hand, it can ensure the maximum results of the moving average.

Application

1. MACD Golden Cross: DIF breaks through DEM from bottom to top, which is a buy signal.

2. MACD dead cross: DIF breaks through DEM from top to bottom, which is a sell signal.

3. MACD green turns red: MACD value changes from negative to positive, and the market turns from short to long.

4. MACD red to green: MACD value changes from positive to negative, and the market turns from long to short.

Usage Tips

1. When DIFF and DEA are both positive, that is, when both are above the zero axis, the general trend is a bull market. If DIFF breaks through DEA ??upward, you can buy.

2. When DIFF and DEA are both negative, that is, when both are below the zero axis, the general trend is a short market, and DIFF falls below DEA and can be sold.

3. When the DEA line deviates from the K-line trend, it is a reversal signal.

4. DEA has a higher error rate during the game, but if it is combined with RSI and KD, it can make up for the shortcomings appropriately.

5. Analyze the MACD histogram. When it changes from positive to negative, it often indicates the time to sell, and vice versa, it is often a buy signal.

Parameter description

DIF parameter - default value: 9 Fast EMA parameter - default value: 12 Slow EMA parameter - default value: 26

Simple overview, For details, you can refer to the relevant books to learn about it systematically, and at the same time practice with a simulation board. In this way, you can quickly and effectively master the theory and practice. The current Niugubao simulated stock trading is not bad, and many of its functions are sufficient. It is helpful to analyze the market and individual stocks. I hope it can help you. Happy investing!