A three-line indicator derived from the Stochastic. By adding a J line that overshoots past 0 and 100, behind the familiar K and D, it draws how far the crowd's drive has swung to either side. A leading oscillator widely used in China, across Asia, and in crypto.
KDJ is a three-line oscillator derived from the Stochastic.
Its defining feature is a third line, J, added behind the familiar K and D.
Like the Stochastic, it measures where the close sits within the recent range. If the current close sits high in the range, buyers are pushing it up. If it sits low, sellers are pressing it down. Expressing that position from 0 to 100 forms the foundation.
From there it smooths K and D, then finally draws a line with the formula J = 3K − 2D, which amplifies the gap between K and D.
This J line is the star of KDJ. It is the most sensitive and leads, and at extremes it leaps past 0 and 100, overshooting above 100 or below 0.
The aim of KDJ is to show which way, and how far, the crowd's drive has swung, by magnifying the part that has swung too far. It is widely used in China, across Asia, and in the world of crypto.
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