How the KDJ indicator is used in forex trading

KDJ indicator practical application rule 1: low golden cross, high death cross.

As an overbought and oversold indicator, of course, the study is the high and low of the exchange rate, so the golden cross and death cross of the high and low are more valuable. To study an indicator, we must look at it from the following aspects: high, low, long-short equilibrium point, divergence, periodic resonance, etc.

KDJ indicator practical application rule 2: J value witnessing inflection point is oriented.

Generally speaking, the J value is below 0 and turns upwards and crosses the 0 axis, which is the ** buy point; Above 100, turn down and cross 100 down, which is the first selling point. In addition, the K and D values, as auxiliary conditions for the J value, will have a strong high warning significance if they cross the 80 line.

KDJ indicator practical application rule 3: solve the passivation.

Both overbought and oversold indicators have a common drawback, that is, there will be a passivation of the high and the low, which can be confusing. In fact, this problem is relatively easy to solve, and it is easy to deal with it by referring to the values and directions of MA5 and MA10.

KDJ indicator practical application rule four: periodic resonance.

This is a feature that all indicators have. To understand periodic resonance, we must first understand the process by which periodic resonance is formed. The formation of a golden cross below 20 at the monthly level must have gone through a process of 60 minutes of golden cross below 20, a golden cross below 20 on the daily line and a golden cross below 20 on the weekly line, and the reversal of the trend is spread from a small cycle to a large cycle.

Therefore, investors need to carry out ** or sell operations according to the cyclical resonance.

In practice, some of the short-term and fast ** customers often use minute indicators to judge the market outlook to determine the timing of buying and selling, commonly used 15-minute and 30-minute KDJ indicators in the T+0 era, and 30-minute and 60-minute KDJ in the T+0 era to guide entry and exit, Xingyalong trend tracking trading system network is summarized as follows:

a) If the 30-minute KDJ consolidates below 20 for a long time, and the same is true for the 60-minute KDJ, once the 30-minute K value crosses the D value and crosses 20, it may trigger a round of **** that lasts for more than 2 days; If the daily KDJ indicator also has a golden cross at a low level, it may be an intermediate round**. However, it should be noted that this kind of cross is only valid if the K value is greater than the D value of 20 or more after the K value and D value are crossed.

b) If the 30-minute KDJ is above 80 and makes a downward U-turn, the K value crosses the D value and falls below 80, and the 60-minute KDJ just crosses 20 and is less than 50, it means that there will be a pullback, and after the 30-minute KDJ bottoms, it may continue to rise.

The technical indicators commonly used by domestic investors are **, MACD, RSI, KDJ, etc., which are commonly used by investors who do ** before rubber accompanies and then switch to foreign exchange.

Do foreign exchange also often use Bollinger bands, ** division, etc., to judge support and resistance, and then choose a few technical indicators suitable for their own scattering, combined with i, to form a combination, to analyze and judge the ** trend on the line, too many indicators will affect their own judgment.

The name of the KDJ indicator in the MT4 software is: Stochastic OSCILLATOR, which is the scientific name of "KDJ", and the standard translation is "Stochastic ** indicator".

In foreign language, "stochastic" means random, and this indicator is composed of three indicator lines: "%k", "d" and "j", so mainland investors affectionately called it "kdj" when they first introduced this indicator.

The role of the indicator is to observe the oversold and overbought phenomenon in a consolidation market, or to observe the "divergence" between the indicator and the indicator in a one-sided market.

Now the mainstream forex charts have abandoned the "%j" line, but only take "%k" (fast line) and "%d" (slow line) to observe the oversold and overbought **.

1. What is the **kdj indicator?

The KDJ indicator is a technical indicator that consists of three curves, which are **, D, and J. Among them, ** is a fast random indicator calculated on the basis of ** price, D line is a slow random indicator calculated on the basis of **, and J line is an indicator calculated on the basis of ** and D line. The KDJ indicator is widely used in trading to assist in analysis and analysis.

Second, the KDJ indicator golden cross and death cross

When the ** and D lines cross, you can judge the trend of **** according to their relative position and direction. If the ** crosses the D line from the bottom to the top, forming the so-called "golden cross", it indicates that the trend of the **** may be upward. This is often seen as a signal because it signals that it is likely to be.

Conversely, if ** crosses the D-line from top to bottom, forming a so-called "death fork", it indicates that the trend of **** may be downward. This is often seen as a sell signal, as it signals that **** is likely to be.

3. KDJ indicator parameter setting skills

When trading with the KDJ indicator, it is very crucial to set the parameters of the indicator correctly. Here are some of the more common tips:

Time period: Different timeframes will have different effects on the KDJ indicator. In general, the short-term timeframe will cause the KDJ indicator to fluctuate more violently, while the long-term timeframe will cause the KDJ indicator to fluctuate more moderately.

Therefore, when choosing the timeframe of the KDJ indicator, you need to consider the trading period and your own investment strategy.

Parameter settings for k-value, d-value, and j-valueThere are many parameter settings for the KDJ indicator, and the default one in general trading software is (9,3,3). Investors with different strategic objectives will set different KDJ indicator parameters, and the effect of using them will be different.

1.KDJ indicator on daily with (6, 3, 3) as parameters, the sensitivity to ** fluctuations is relatively strong, and the frequency of its changes is very high, which is suitable for short-term investors in the jujube line.

2.KDJ indicator on daily with (18, 3, 3) as parametersIt has the advantages of high sensitivity and stability, and is suitable in most cases.

3.KDJ indicator on daily with (24, 3, 3) as parameters, to a greater extent, excludes false signals generated by ** volatility, and is more suitable for medium-term investors.

4. Precautions for KDJ index

It should be noted that the KDJ indicator is only an auxiliary tool in the analysis and cannot be used as a basis for buying and selling alone. It can be combined with the ** index or RSI indicator for comprehensive analysis, and can also use jellyfish quantification for quantitative trading of KDJ indicators, and use the trigger of KDJ's golden cross ** signal and death cross sell signal to realize the automatic trading of golden cross and death cross. At the same time, investors should consider a variety of factors, including the company's fundamentals, macroeconomic environment, industry prospects, etc., to make investment decisions.

1. The KDJ indicator is divided into 3 intervals, and 0 to 20 is the oversold area, indicating that ** is about to bottom out; 80 to 100 is the overbought zone, which means that Ding's Sakura is coming; 20 to 80 is the finishing area, this state is suitable for wait-and-see, and then shoot after the direction is clear.

2. The K value and D value are always between 0 and 100, D is overbought when it is greater than 80, and D is less than 20 is oversold.

3. In the trend, the K value is less than the D value, and when the D line breaks through upward, it is a buy signal. In a trend, when the K value is greater than the D value and the D line is broken in the direction, it is a sell signal.

4. The KD indicator has extremely high accuracy for **index and popular** stocks, but it is not suitable for small-cap stocks and inactive stocks.

5. When KDJ diverges from the stock price, it is generally a signal that the first is about to reverse. The rise of K and D values or the weakening of the speed of ** and the flattening of the slope are early warning signs of a short-term turnaround.

Many shareholders are very clear about the expectations of speculation, and the performance of listed companies is important, but they must not only look at the company's fundamentals, but also understand the technical aspects. As long as it comes to the technical side, most people are no strangers to MACD indicators, but they are very unfamiliar with the use of KDJ. So today, let's analyze and see what the KDJ indicator is, and how we should use this technical indicator to improve the fault tolerance rate of our own operations.

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Overall, the KDJ indicator is only a technical means to judge the trend, and if you want to accurately figure out the trend, the standard of consideration should also be combined with the trend, the sector and current policies and other factors. If you really don't have enough time to study a ** friend, you might as well click the link below, enter what you want to know, and conduct an in-depth analysis [Free] Test your **current valuation position?

3. Advantages and disadvantages of KDJ indicators.

The advantage of the KDJ indicator is that it is very sensitive to stock price changes, and can be used as a reference for ** operation. However, due to the high sensitivity of the indicator, ** or sell signals are sometimes sent prematurely, which can easily lead to mistakes by investors. So how do you find the perfect time to buy and sell?

To make money in the market, you must first do a good job of stock selection. How to choose a good stock? It can be summed up in six aspects, namely:

Patterns, **, technical indicators, volume, hot spots and main costs. In this issue, we will first talk about the joint golden cross stock selection method of weekly KDJ and daily KDJ. The daily KDJ is a sensitive indicator, which changes quickly and has strong randomness, and false buy and sell signals often occur, making investors confused when buying and selling according to the buy and sell signals it sends.

Using the weekly KDJ and daily KDJ common golden cross stock selection method, you can filter out false signals and find high-quality success signals. The buying point selection of the weekly KDJ and the daily KDJ common golden cross stock selection method can be as follows: The first ** method:

Hit the advance measurement ** method. In actual operation, such a problem is often encountered: because the daily KDJ changes faster than the weekly KDJ, when the weekly KDJ golden cross, the daily KDJ has been a few days ahead of the golden cross, the stock price has also risen for a while, and the cost has been raised.

Aggressive investors can reduce costs by taking up the lead**. The conditions to be met by the method of playing the amount of advance are: closing the weekly yang line, and the weekly line K and J two lines are about to have a golden cross (not a golden cross).

The daily KDJ develops a golden cross during the week, and the daily closing volume of the golden cross is a positive line (if the daily KDJ golden cross is on the same day, the trading volume of the day is greater than the 5-day average volume. The second method: weekly KDJ has just a golden cross, and the daily KDJ has a golden cross** method.

The third method: the weekly line K and D lines "checkmate not die" method. The conditions to be met for this method are:

After the weekly KDJ golden cross, the stock price retraced to close the weekly negative line, and then re-increased the volume to the upside. The two lines of the weekly line K and D will be dead forks, but there is no real dead fork, ** re-open the mouth to the upside. Daily KDJ golden cross.

With this method, you can capture a fast and strong ascent. The color of the KDJ indicator in various software: ** is white, D line is yellow, J line is purple.