KDJ index, also known as stochastics, is a very novel and practical technical analysis index. 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.
KDJ, as its name implies, is composed of k value, d value and j value. Three components. Among the three curves of KDJ indicator, the most frequent fluctuation is J line (purple), followed by K line (white), and the least frequent fluctuation is D line (yellow). Note: Colors are optional.
People who are used to the KDJ indicator of fast-forward and fast-forward can use it on the daily line, and the ultra-short line can also be switched to the 15 minute line and the 60 minute line as a judgment, and the long-term stocks can be switched to the weekly and monthly line levels as a reference.
Generally speaking, if the j value is between 0 and 20, it means that it is in an oversold area and the market is in a very weak state, then it is a very good buying point and the position can be heavier; When the j value is between 80- 100, it means that it is in an overbought area and the market is in a very strong state. At this time, you should clear the warehouse and sell it, while at 20 to 80, it is in a shock range, so you should wait and see or sell high and suck low.
KDJ index usually needs to be judged by combining golden fork and dead fork. Among them, the relationship between k and d also has the relationship of golden fork and dead fork. When K crosses D, it is a golden fork, which is a buying signal, while when D crosses K, it is a dead fork, which is a selling signal.
Another thing to note is the deviation of KD index. KD deviation means that when the stock price is still rising or falling, KD index can no longer hit a new high or a new low, or even reverse downward or upward, that is, deviation occurs. When KD is at a high or low level, if the stock price deviates from the index, it is a signal that needs close attention.
Finally, KDJ indicators are difficult to understand only in theory, and can be better understood in combination with the stock market. In addition, the index of the stock market is not one kind, nor is it absolutely accurate. It may be better to learn more indicators and use them together, but be careful not to confuse them.