Stochastic / KDJ

Definition

Measures overbought/oversold by the close's position within the recent high-low range.

Formula

RSV=(C−n-low)/(n-high−n-low)×100, K=⅔Kₚᵣₑᵥ+⅓RSV, D=⅔Dₚᵣₑᵥ+⅓K, J=3K−2D; international Stochastic convention: %K=RSV, %D=SMA(%K,3), Slow/Full versions smooth once more (using SMA rather than the recursion above)

Default parameters

{
  "k": 9,
  "d": 3,
  "j": true
}

How to read it

>80 overbought, <20 oversold; K crossing above D = golden cross; J overshooting the bounds signals reversal.

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