The Chinese name of KDJ indicator is stochastics, which originated from the futures market.

The application law of KDJ index KDJ index is three curves, which are mainly considered from five aspects in application: the absolute number of KD value; The form of KD curve; KD index crossing; Deviation of KD index; The value of the j index.

First consider the value of KD. The range of KD is 0 ~ 100, which is divided into several areas: over 80 is overbought area, below 20 is overbought area, and the rest is wandering area.

According to this classification, if KD exceeds 80, we should consider selling, and if KD is below 20, we should consider buying. It should be noted that the above division is only a preliminary process of applying KD index, and it is just a signal. If you operate completely in this way, it is easy to lose money.

Second, consider from the shape of KD index curve. When the KD index forms a head-shoulder top shape and multiple tops (bottoms) at a higher or lower position, it is a signal to take action. Please note that these forms must appear in a higher or lower position. The higher or lower the position, the more reliable the conclusion.

Third, consider from the intersection of KD indicators. The relationship between K and D, like the relationship between stock price and MA, also has the problems of death crossover and gold crossover, but the application of crossover here is very complicated, and many other conditions are attached.

Take the bottom-up intersection of K and D as an example: K intersection D is a golden intersection and a buying signal. However, whether you should buy a gold fork depends on other conditions. The first condition is that the position of the golden fork should be relatively low, especially in the oversold area. The lower the better.

The second condition is the number of times to intersect with d, sometimes in the low position, k and d have to intersect back and forth several times. The minimum crossing times is 2, and the more the better.

The third condition is the position of the intersection point relative to the low point of KD line, which is often referred to as the "right intersection point" principle. K only intersects D when D looks up, which is much more reliable than when D is still falling.

Fourth, consider from the deviation of KD index. If KD is high or low, if it deviates from the trend of stock price, it is a signal to take action.

Fifthly, if the value of J index exceeds 100 and is lower than 0, it belongs to the abnormal price area. More than 100 is overbought, less than 0 is oversold.

KDJ comprehensive investigation

Emphasizing the importance of technical indicators is mostly from the overall perspective of technical analysis theory. In practice, investors should pay attention to the application and practice of various technical analysis. With the passage of time, the theory of technical analysis has become complicated. Every technical analysis has different angles and emphases, so it is really difficult to master it. However, using these technical means, we must understand that the theories and indicators of these technical analysis have their own weaknesses and defects. Therefore, using a certain index alone will have great blindness and limitations, and the direct consequence is misjudgment and investment (speculation) failure. Therefore, for a mature professional shareholder, it is necessary to master a variety of technical analysis methods, make a comprehensive investigation, think from multiple angles, and give full play to the advantages of various technical analysis in order to be in an invincible position.

In the process of analyzing KDJ, the author has always emphasized the sensitivity of this index. In fact, this sensitivity also exists in other technical indicators, but too many investors use KDJ, which increases its vibration. This leads to higher and higher sensitivity of this index. In the past, people used random indicators to calculate the immature random value of the last day through the highest price, the lowest price and the closing price of the last day in a specific period (often 9 days) and the proportional relationship between them. However, the calculation of KDJ by smma method is often very random, and the reliability of J value is the worst, because it is too sensitive, followed by K value and D value is slightly stable. Because KD is born out of William indicator, it also has the ability of William indicator to prompt overbought and oversold phenomenon. In practice, when the K line crosses the D line in the low position, it is called "golden fork", which is a short-term signal to grab orders; When the K-line falls at a high level and crosses the D-line, it is also called a dead fork, which is a signal to attract gold. In this process, the J-line often shows a rising and falling trend ahead of KD, just like the starting gun in the hands of the referee on the sports field, athletes can't get up and run before the gun goes off, otherwise it will be illegal and will be punished, but once the gun is raised, athletes must keep scrambling. For example, before the start of 3 1 65438 last on February last year, KDJ bottomed out at the moment of sinking, then the J line bottomed out, and then crossed the D line with the K line to form a "golden cross", and then looked at the William indicator, it also bottomed out at this time. When the two cross, a round of rebound is ready.

Practical Empirical Application of KDJ Index (1)

In the traditional Qianlong software commonly used by brokers, there are dozens of technical indicators, which make new investors at a loss. With the popularization of computers, especially the continuous innovation of stock professional software, some stock software has the function of self-editing index, which makes technical index lovers enjoy adaptation and innovation. There are thousands of popular indicators on the internet, which also makes the indicators of old investors dizzying. In fact, they are all the same, which is nothing more than the variation of different combinations of price moving average expressions. Zhaoyun's big guns in the Three Kingdoms can spread all over the world, not by the guns themselves, but by the users of the guns!

Any technical index has its defects and limitations, such as MACD's blind spot on shock trend, KDJ's blind spot on rolling unilateral passivation, the blind spot on the top and bottom of Baota Line, the blind spot on whether the pressure support of the moving average is effectively adjusted in place, and the blind spot that the turnover rate is indistinguishable from the absorption. We can use other indicators to make up for each other's shortcomings, such as KDJ and CDP to make up for the auxiliary MACD system; CCI and DMI make up for KDJ system; KDJ, RSI complementary moving average system; The deviation between KDJ and RSI makes up for the Baota line system; Stock price and K-line moving average make up for the blind spot of turnover rate. Of course, sometimes one indicator can't completely make up for the defects of another indicator, so we need to look at this problem correctly.

The following is the author's personal opinion on common KDJ indicators, combined with his own experience, for reference only.

First of all, briefly introduce the concept:

The full name of KDJ is random index, which was founded by Dr. George Ryan in the United States. Its comprehensive momentum concept, strength index and the advantages of moving average are also a common technical analysis tool in European and American securities and futures markets. Stochastics's design thought and calculation formula originated from William's (W%R) theory, but it is more valuable than W%R index. W%R index is generally limited to judging the overbought and oversold phenomenon of stocks, while stochastics combines the idea of moving average to judge the buying and selling signals more accurately. It is an overbought and oversold index fluctuating between 0- 100, which consists of three curves: K, D and J, and integrates some advantages of momentum index, strength index and moving average in design. In the calculation process, the relationship between the price level and the closing price is mainly studied, that is, by calculating the true amplitude of price fluctuations such as the highest price, the lowest price and the closing price on the same day or in recent days, the random amplitude and short-term fluctuation of price fluctuations are fully considered. Its short-term market measurement function is more accurate and effective than the moving average, and it is more sensitive than the relative strength index RSI in short-term overbought and oversold. In short, KDJ is a concept of random fluctuation, which reflects the strength of the price trend and the trend of the band, and is very sensitive to grasping the short-term trend of the market.

Second, the calculation formula:

Take KDJ with a 9-day period as an example, first calculate the "immature random value" of the last 9 days, that is, RSV value. The calculation formula of RSV is as follows: RSVT = (CT- L9)/(H9-L9) *100, where: CT-closing price of the day L9-. In fact, the sum of RSV value and %R value in the same period is equal to 100, so RSV value is also between 100. After getting RSV value, we can get K value and D value: K value is smma of RSV value on the 3rd day, and D value is J line obtained by subtracting twice D value from three times K value of smma value on the 3rd day. The formula is: kt = RSVT/3+2 * kt-1/3dt = kt/3+2 * dt-65438+. If there is no KD value, you can replace the KD value of the previous day with the RSV value of the current day or 50. After the smoothing operation, the KD values of different initial periods will be consistent, and there will be no difference. The values of k and k will always be between 0 and 100. According to the crossing principle of fast and slow moving averages, K-line breaks through K-line upward for buying signal, and K-line falls below D-line for selling signal, that is, the market is an obvious upward trend, which will drive K-line (fast moving average) and D-line (slow moving average) to rise. If the rally starts to slow down, it will slowly react to the K value and D value, making the K line fall below the D line. At this time, it is a common and simple application principle to adjust the downward trend in the short and medium term.

Practical Empirical Application of KDJ Index (2)

Third, the application principle: KDJ indicator random indicators are relatively sensitive and fast, which is a good 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 operates at ordinary times, it pays attention to the position of weekly KDJ, and judges the high and low points of the period of the mid-line band, so it often happens 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 of daily trading. For short-term travelers in small bands, 30 minutes and 60 minutes KDJ are important reference indicators; 5 minutes and 15 minutes KDJ can provide the best time for investors with designated trading plans to place orders immediately. 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 should be clear at a glance. If * * * vibration occurs 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 the quick confirmation line-the value above 90 is overbought, and the value below 10 is overbought; Line D is a slow trunk line-the value above 80 is overbought and the value below 20 is oversold; J-line is a direction sensitive line. When the j value is greater than 100, especially for more than 5 consecutive days, the stock price will at least form a short-term head, while when the j value is less than 0, 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 graphically, it is a buy signal.

In actual combat, when the K line and the D line cross below 20, the signal of short-term buying is more accurate at this time; If the K value is below 50, the D value crosses from bottom to top twice, forming a "W bottom" shape with the right bottom higher than the left bottom, and the stock price may have a considerable increase in the afternoon.

(3) When the value of k is gradually less than the value of d, the graph shows that the K line crosses the D line from above, indicating 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 line and the D line cross downward above 80, the short-term selling signal at this time is more accurate; If the value of K is above 50 and the value of D breaks down from top to bottom twice, forming an "M-head" shape with the right head lower than the left head, the stock price may drop considerably in the afternoon.

(4) It is also a practical method to judge the top and bottom of the stock price by 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 belongs to the top deviation and should be sold; (b) The stock price is low, but the KD value is not low, which belongs to the 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 belongs to the top deviation and should be sold; (d) The stock price is not at a new low, but the KD value is at a new low, which is a bottom deviation and should be bought; It should be noted that the method of judging the deviation between the top and bottom of KDJ can only be compared with the KD value of the previous wave of high and low points, and can not be compared by jumping over.

Practical Empirical Application of KDJ Index (3)

Fourth, the application experience:

(1) In practice, some short-term customers often use the minute indicator to judge the market outlook and decide the trading opportunity. In the T+0 era, 15 minutes and 30 minutes KDJ indicators are commonly used, and in the T+0 era, 30 minutes and 60 minutes KDJ are used to guide entry and exit. Several empirical rules are summarized as follows: (a) If the KDJ is at 20 in 30 minutes, if the daily KDJ indicator is also at a low level, it may be an intermediate market. However, it should be noted that it is only effective when the K value is greater than 20% of the D value after the intersection of the K value and the D value. (b) If KDJ turns down above 80 in 30 minutes, the K value goes below the D value, and falls below 80, 60 minutes, KDJ just passes 20 and is less than 50, indicating that the market will turn down, and after KDJ bottoms out in 30 minutes, it may continue to rise; (c) If the KDJ is above 80 in 30 minutes and 60 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 downward adjustment of the market for at least 2 days; (d) If the KDJ falls below 20 in 30 minutes and turns upward, and the KDJ is still above 50 in 60 minutes, it is necessary to observe whether the K value will effectively exceed the D value (the K value is more than 20% of the D value) in 60 minutes, and if it is effective, start a new round of upswing; 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 50 in 30 minutes, and KDJ just crosses upward in 60 minutes, it means that the market may continue to rise again, and it is only retreating at present; (f) The deviation of KDJ in 30 minutes or 60 minutes can also be used as a basis for judging the top and bottom of the market. For details, please refer to the previous discussion on daily deviation; (g) In a super-strong market, the KDJ can reach more than 90 in 30 minutes, and the high position repeatedly appears invalid crossover. At this point, the focus is 60 minutes of KDJ. When KDJ crosses downward in 60 minutes, it may trigger a short-term deep retreat; (h) During the plunge, KDJ can be close to zero within 30 minutes, but the overall trend is still declining. At this time, we should also look at KDJ in 60 Minutes. When KDJ effectively crosses upward within 60 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-term indicators such as MACD should be used instead; When the stock price fluctuates greatly in the short term and the daily KDJ response lags behind, CCI, ROC and other indicators should be used instead; Or use the SLOWKD indicator.

(3) The weekly KDJ parameter is generally 5, and the weekly KDJ index has obvious hints for bottoming out and peaking. Accordingly, band operation can save a lot of hard work and strive for maximum profit. Need to be reminded that the weekly J value generally rises at the V-shaped single bottom in the oversold area, indicating that it is only a rebound market, and the formation of a double bottom is a reliable intermediate market; However, the J value may drop sharply at the top of the overbought area. At this time, we should be vigilant and judge comprehensively with other indicators. However, when the stock market is in a bull market, the stock price will still rise sharply after the J value is overbought for a period of time.

References:

The article comes from the stock market horse classics

Simply put:

KDJ is a stochastic indicator and a very popular short-term indicator in the world. K, D and J are just the names of performance indicators. Algorithm principle:

Rsv= (lowest in closing -n days)/(highest in n days-lowest in n days) * 100.

K is the M-day moving average price of RSV.

D is the 0-day moving average price of M 65438+K.

J is 3K minus 2D.

Basic usage:

1, oversold below 20, overbought above 80.

Gold forks below 2.20 are buying points, and dead forks above 80 are selling points.

3. The second crossing of the high position is a big drop, and the second crossing of the low position is a big rise.

4. The deviation between stock price and index is an excellent opportunity to operate.

Cross roads 5 and 50.

6. The J-line is of little reference significance, but it can be used as an early warning for the stock price to turn around.

Precautions:

1, don't look at KDJ in a narrow range.

2. After a long-term unilateral market, it is inappropriate to look at KDJ again, and this indicator has been passivated.

3. Short-term random indicators are not suitable for long-term research.