Three minutes to understand KDJ indicators
KDJ index is a better tool for trend band analysis. Taking 9 days as a cycle, according to the crossing principle of moving average, by smoothing the highest price, lowest price and closing price of stock price within 9 days, one fast (k) and one slow (d) trend lines are obtained, and the value of J line is obtained through 3d-2k.
Generally speaking, when the K value is about 20 and crosses the D value from the right direction of the D value, it is a short-term buy signal; When the K value is around 80 and crosses the D value from the right direction of the D value, it is a short-term selling signal. Higher level usage also includes: 1. The K value forms a phenomenon that one bottom is higher than one bottom, and at a low level below 50, when the D value is crossed twice continuously from bottom to top, the stock price tends to rise greatly. 2. The K value is lower than the bottom, and at the high level of more than 50, when the D value is crossed twice from top to bottom, the stock price tends to rise greatly. 3. When the K value is higher than the overbought area of 80, the short-term stock price is easy to fall back; Below 20 oversold areas, short-term stock prices are easy to rebound upward.
However, there are also various "flaws" in the actual use of KDJ. For example, the K value often lingers and "passivates" after entering the overbought or oversold area, which makes investors at a loss; When the stock price fluctuates violently in the short term or the instantaneous market fluctuates too much, the use of Kd value cross signal trading often leads to the dilemma of buying at the high point and selling at the low point.
In addition, according to personal experience, KDJ index often has the following analytical purposes: 1. If the J value is > 100, especially if it is greater than 100 for three consecutive days, the stock price often has a short-term head; 2. If the J value is less than 0, especially if it is less than 0 for three consecutive days, the stock price tends to have a short-term bottom again. It is worth investors' attention that the signal of J value will not appear frequently. Once it appears, the reliability is quite high. Around us, there are many experienced investors looking for J value signals to grasp the best trading point of stock, and this signal can be said to be the essence of KDJ index.