The KDJ indicator is an overbought and oversold indicator, while the Bollinger Bands is a support pressure indicator. The advantage of the combination of the two is: it can make the signal of the KDJ indicator more accurate. At the same time, because the Bollinger Band indicator in the price daily K-line indicator system often reflects the mid-term operating trend of the price, use these two Indicators to determine whether the price is short-term or mid-term volatility have a certain effect, especially for determining whether the price has reached a short-term peak (bottom) or entered a mid-term rise (fall), which has a relatively good effect.
Let us take Taiji Group (600129) as an example. On April 9, 2001, the KDJ index of this stock appeared near the 50 central axis area. According to the operating principles of the KDJ index, the signal of the intersection that occurs in the 50 central axis area is not certain, but if the analysis is combined with the BOLL index, a clear conclusion may be drawn. On the same day, the stock price line crossed the suppression of the MB line. At this time, the stock price line still has a certain amount of space from the upper UP line to make the operator profit. Based on this principle, we can pay attention to this crossover of the KDJ indicator and buy it in the short term.
Comprehensive application of KDJ index and BOLL Bollinger band index
We know that the upper rail in the Bollinger Band has a pressure effect, and the middle and lower rails have a supporting (pressure) effect. Therefore, when the price drops to the middle or lower Bollinger Band, the signal sent by the KDJ indicator can be ignored. And take action. Of course, if the KDJ indicator has also reached a low level, it should be regarded as the result of mutual verification of the short-term trend and the mid-term trend, and a more active operation strategy should be adopted.
However, it should be noted that when the price falls below the Bollinger Band, even if it is supported and stabilized, the KDJ indicator also rises simultaneously, and the signal that the trend can be turned has been issued, so at most it can only grab a rebound. When the KDJ indicator reaches a high of 80, it is safer to take a sell action, because when the stock price falls below the middle of the Bollinger Band, the opening of the link will be narrowed. At this time, it will take a longer time to repair the indicator. Consolidation, so whether from the perspective of preventing downside risks or considering the opportunity cost of holding, it is not appropriate to continue holding.
Finally, summarize the principles of comprehensive use of KDJ indicators and Bollinger Bands indicators: the Bollinger Bands are the mainstay, the mid-line judgment of price trends, the KDJ indicator as a supplement, the short-term price trend judgments, the buying and selling signals issued by the KDJ indicator Need to use Bollinger Bands to verify cooperation. If both of them issue the same instruction, the accuracy of the transaction is higher.