When the j value is greater than 90, especially for more than 5 consecutive days, the stock price will at least form a short-term top; Conversely, when the value of j is less than 10, especially for several days or longer, the stock price will at least form a short-term bottom. Therefore, the J-line has become a yardstick to judge the short-term market.

Second, the significance of the J line:

In KDJ indicators, J-line is a direction-sensitive line, which runs faster up and down, often ahead of K-line and D-line, so the direction of J-line often becomes the "pioneer" of KDJ indicators, and J-line becomes the most critical line to judge market and trend changes.

Third, KDJ application:

1, generally speaking, The D-line from the bottom to the top is a buy signal, and from the top to the bottom is a sell signal.

2.KD fluctuates in the range of 0 ~ 100. 50 is the long-short balance line. If it is a multi-party market, 50 is the post-support line; If it is in the empty market, 50 is the pressure line for rebound.

3. The K-line crosses the D-line at the low position as a buying signal, and the K-line crosses the D-line at the high position as a selling signal.

4. When the K line enters 90 or above, it is an overbought area. The area below 10 is oversold; ? Line D enters the overbought area above 80. The area below 20 is oversold. Pay attention to the timing of buying and selling

5. The M-shaped trend of the D-line in the high-grade area is a common top shape. When the second head appears, when the K-line crosses the D-line for the second time, it is a sell signal.

The W-shaped trend of D-line in low-level areas is a common bottom shape. When the second bottom appears, when the K-line crosses the D-line for the second time, it is a buy signal.

When the M-shaped or W-shaped second part appears, if it deviates from the price trend, it is called "top deviation" and "bottom deviation" respectively, and the trading signal is highly reliable.

6. The value of j can be greater than 100 or less than 0. The J-index provides a credible judgment on whether actions can be taken according to KD trading signals. Generally, when the value of j is greater than 100 or less than 10, it is considered as the opportunity to take trading action.

7.KDJ is essentially a random fluctuation index, so the value of n in the calculation formula is usually small, and it is appropriate to take 5 to 14, which can be selected according to the characteristics of the market or goods. However, applying KDJ to weekly or monthly lines can also be used as a tool for medium and long-term forecasting.

Extended data

The origin of KDJ

The Chinese names of 1 and KDJ indicators, also called stochastic indicators, originated in the futures market and were initiated by GeorgeLane.

Stochastics KDJ first appeared in the form of KD index, which was developed on the basis of William index.

2. However, the KD indicator only judges the overbought and oversold phenomenon of stocks, while the KDJ indicator incorporates the concept of moving average speed, forming a more accurate basis for buying and selling signals. In practice, K-line and D-line cooperate with J-line to form KDJ index.

3.KDJ index mainly studies the relationship between the highest price, the lowest price and the closing price in the design process, and also integrates some advantages of momentum concept, power index and moving average. Therefore, it can judge the market quickly, quickly and intuitively, and is widely used in the short-term trend analysis of the stock market. It is the most commonly used technical analysis tool for futures and stock markets.