The KDJ indicator is also called a random indicator. It was first proposed by Dr. George Lane. It is a fairly novel and practical technical analysis indicator. It was first used in the analysis of the futures market and later widely used in the stock market. The short-term and medium-term trend analysis is the most commonly used technical analysis tool in the futures and foreign exchange markets.

The principle and calculation method of KDJ indicator

Principle of KDJ indicator

The stochastic indicator KDJ is generally based on the principle of statistics, through the highest price, the lowest price, and the closing price of the last calculation cycle and between the three during a specific period (often 9 days, 9 weeks, etc.). Proportional relationship, to calculate the immature random value RSV of the last calculation cycle, and then calculate the K value, D value and J value according to the method of smooth moving average, and draw a curve chart to study the stock trend.


The stochastic indicator KDJ is a point formed on the coordinates of the indicator by the K value, D value and J value calculated based on the basic data of the highest price, the lowest price and the closing price, which is formed by connecting countless such points. A complete KDJ indicator that reflects the trend of price fluctuations.

It is mainly a technical tool that uses the real volatility of price fluctuations to reflect the strength of price movements and overbought and oversold phenomena, and sends trading signals before prices have risen or fallen. In the design process, it mainly studies the relationship between the highest price, the lowest price and the closing price. It also incorporates some advantages of the momentum concept, strength index and moving average, so it can be judged more quickly, quickly and intuitively. Quotes. The stochastic indicator KDJ first appeared in the form of the KD indicator, and the KD indicator was developed on the basis of the William indicator. However, the William indicator only judges the phenomenon of overbought and oversold stocks. In the KDJ indicator, the concept of moving average linear speed is integrated to form a more accurate basis for buying and selling signals. In practice, K-line and D-line are used in conjunction with J-line to form KDJ indicators. Since the KDJ line is essentially a concept of random fluctuations, it is more accurate for grasping the short-term and medium-term market trends.