KDJ
KDJ
A stochastic variant with an extra J line that overshoots the extremes to flag early reversals.
How to read it
KDJ is a stochastic variant with three lines: %K and %D behave like the Stochastic, while %J = 3K − 2D amplifies their gap and deliberately overshoots the 0–100 range. The further J swings past the extremes, the more stretched the move is.
Trading signals
Trade the K/D cross like the Stochastic, and use J for early warning: J spiking above the band and turning down often precedes the K/D cross, giving an aggressive entry. It's fast and noisy, so it's best confirmed by the slower lines or a trend filter.
Parameters
K, D and J periods set the smoothing of each line. Shorter K makes the whole set more reactive; a longer D calms the signal line; J follows from the other two.
- KDJ K Period
- Lookback for the %K line.
- KDJ D Period
- Smoothing length for the %D line.
- KDJ J Period
- Weighting length for the J line.