KDJ

Indicator Description

KDJ is a momentum indicator that reflects the overbought and oversold state and trend changes in the market by calculating the relationship between the highest price, lowest price, and closing price.

Function Information

• Function Name: KDJ
• Input Parameters: High, Low, Close
• Parameter Settings: timeperiod1 (default: 13), timeperiod2 (default: 5)
• Output: k, d, j

Calculation Principle

KDJ reflects the overbought and oversold state of the market by calculating the stochastic indicator (K value), smoothed stochastic indicator (D value), and J value. The K value reflects the position of the price within the period, the D value is the moving average of the K value, and the J value is 3 times the K value minus 2 times the D value.

Application Scenarios

1. Overbought and oversold judgment
2. Trend reversal identification
3. Divergence signal analysis
4. Trading signal generation

Usage Suggestions

1. K line crossing above D line can be seen as a buy signal
2. K line crossing below D line can be seen as a sell signal
3. Use the J value to judge overbought and oversold
4. Pay attention to the use of divergence signals