Category: Money tips Release Date: 2005-12-26
KDJ indicator is also called the random index. In the general technical analysis software, KDJ indicator from the three curves, namely, the K-line, D line and the J line. KDJ indicator is based on statistical principles and derived its price fluctuations in the formation of the day's closing price, highest price, lowest price for basic data, it calculated the K-value, D value, and J values in the index coordinates the formation of a point to connect these points are numerous, they form a complete price fluctuations reflect the trends and conditions KDJ indicator.
Let's summarize the basic application of the principle of KDJ indicators: 1. Range. KDJ indicator in technical analysis formed graph coordinates, the vertical axis values range from 0 ~ 100, K values, D values have fluctuated in the range, but the J values range unlimited. Generally speaking, when the K value and D in the vertical axis of more than 80 areas, is overbought zone indicators show bearish trend may occur at any time, should be taken to sell the operation; when the K value and D values in the vertical axis 20 the following when areas are oversold zone indicators show bullish trend may occur at any time, action should be taken to buy. When the K value, D value, J value is located in the region around the vertical axis 50 when the mean trend was not obvious, or the price trend is in a consolidation phase of cowhide.
2. Cross-case. When the K value of the top-down through the D value, and form a cross, we called the "death cross", indicates the future trend will be towards the price of running the short side of the situation is conducive to change; when the K value of bottom-up through the D value, form a cross, we called the "golden cross", indicating a trend in future prices will probably run favorable to the evolution of multi-party situation. In general, the vertical axis 50 regions there is not obvious cross, gold cross occurred in the region below 20 oversold zone, but also the more effective the lower the death resulting from cross-region in the overbought zone above 80, the higher the more effective the .
There are two of the more important cross-cutting principles of judgments based on: the number of cross-cutting of more and more effective; the right side of the intersection the left side of the intersection more efficient. The so-called right of the intersection is defined as indicators K line and D line in the same direction of motion tend to cross when running in different directions than the intersection of the situation there should be more effective.
3. Patterns, trends and departure from the situation. KDJ indicator fact, the theory can also be the help of patterns, trends deviate from theory to theory and comprehensive judgments, not just only through the range and cross-phenomena can be concluded. Generally speaking, when the target K-line, D line and the J-line formation during operation is similar to the shape formed by price fluctuations, it can be judged according to morphology, such as head and shoulders pattern should be bearish, Yuan Hudi form should be bullish .
The trend line is also present in the KDJ indicator among the three lines run to connect K-line, D line and the J line and every high and low points, you can find support or to stop the target point and running, you can thus be inferred price movements in the existence of support or block, as well as trends in transition opportunities.
Departure from the phenomenon of technical indicators worthy of running a high note, KDJ indicator is no exception. As prices continue to rise in a sustained lower KDJ indicator, or when prices continued to fall in a sustained rise in KDJ indicator, when the phenomenon appeared departure. Once the departure from the phenomenon, it should be vigilant, because at this time the price trend tends to run in the future there was a change for some time.
