KDJ indicator is a technical indicator used to analyze and predict changes in stock trends and price patterns in a traded asset. KDJ indicator is otherwise known as the random index. It is a very practical technical indicator which is most commonly used in market trend analysis of short-term stock.
KDJ consists of 3 lines (K, D and J — hence, the name of the indicator) and 2 levels. The K and D are the same lines you will see when using the Stochastic Oscillator. The J-line, in turn, represents the divergence of the D value from the K. The convergence of these lines will hint at emerging trading opportunities.
Stochastic Oscillator
A stochastic oscillator is a momentum indicator comparing a particular closing price of a security to a range of its prices over a certain period of time. The sensitivity of the oscillator to market movements is reducible by adjusting that time period or by taking a moving average of the result. It is used to generate overbought and oversold trading signals, utilizing a 0–100 bounded range of values.
