Among many technical indicators, KDJ is a relatively novel and practical technical analysis indicator, which is widely used in the short-term trend analysis of the stock market. Of course, it is also the most commonly used technical analysis tool in the futures market. The following is what the kdj line in 202 1 stands for _ Bian Xiao collected the principles and formulas for using the kdj line. I hope I can help you.
What does the kdj line stand for?
Stochastic indicator KDJ is generally a statistical system used for stock analysis, which originated from the futures market. The stochastic indicator, initiated by george ryan, reflects the strength of the price trend through the fluctuation range of the highest price, lowest price and closing price of the day or in recent days.
The three indicator lines of KDJ, blue represents J value, pink represents D value, the remaining one is K value, and the three lines constitute KDJ indicator. J-line shows an upward trend above KD and a downward trend below KD. However, it is not recommended to buy and sell stocks mechanically according to KDJ cross signal, which is enough as a reference for trading points.
Kdj line use principle
1, when the triple value of KDJ is below 20, it means that the market is oversold; If the whole market is above 80, it means that the market is overbought; Between the two, there is a balance between buying and selling, and the changing trend is not obvious.
2. If the values of KDJ are all above 50, the market will be bullish and the market will have an upward trend; If all three are below 50, it shows that the market is short and the market has a downward trend.
3. When the K value is greater than the D value, the market trend rises. When the K line breaks through the D line upwards, the buy signal is displayed, and when the K line breaks through the D value downwards, the sell signal is displayed.
4. When the KDJ indicator shows the opposite trend to the K-line chart, it means that the market may be about to reverse, and when the changing trend of K-line and D-line suddenly weakens, it is also the expected signal of market reversal.
5. According to the moving speed of KDJ Line 3, it can be judged that the market sensitivity of Line D is relatively small, and the market sensitivity of Line J is the largest.
KDJ index calculation formula
There are many indicators with calculation formulas. The calculation formula of this KDJ indicator is: n-day RSV=(Cn-Ln)÷(Hn-Ln)× 100, where Cn is the closing price on the nth day; Ln is the lowest price in n days; Hn is the highest price for n days. The RSV value always fluctuates between 1 and 100. KDJ exponential function
What is the function of stochastic indicators? KDJ 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. In the calculation of random indicators, the highest stochastics price and the lowest price in the calculation period are considered, and the random amplitude in stock price fluctuation is also considered. Therefore, people think that random indicators reflect the fluctuation of stock prices more truly, and their prompt function is more obvious.
What is the best setting of kdj parameters?
The best setting of KDJ index parameters is generally to select parameters (6, 3, 3), that is, the change of D value and J value between three trading days in short-term trading, that is, within five trading days. In practice, the default setting of trading software is 9. What problems will this value cause? Passivation is extremely serious, which is called failure.
In ancient books, 9 is the pole, and the parameters indicate the change in this position. However, in actual trading, the normal two-week trading day is 10 trading day, which is one less, so it is understandable that the parameters are passivated and the errors are formed. On the contrary, if the parameter is changed to 5, this is exactly the change of the market in a week.
In band trading, traders can set the kdj indicator to (18,3,3) as a guiding operation. (18,3,3) parameter is relatively slow in actual operation, but it is practical in most cases. The signal given by the (18,3,3) parameter is relatively stable, which is more suitable for mid-term traders.
In addition, setting kdj index with (24, 3, 3) as the parameter can eliminate the false signal caused by price fluctuation to a greater extent, and it is also a better choice to find the midline buying point or midline selling point of the price. Remember, traders can also set the parameters of an indicator more flexibly according to different stocks and different time periods.
In our actual operation, according to the length of our operation cycle, we can set different KDJ parameters, such as (6, 3, 3), (18, 3, 3), (24, 3, 3), which are marked with short, medium and long operation cycles respectively. Therefore, we need to pay attention to these changes in actual operation and make corresponding settings and changes.