KDJ: The Indicator that Amateur Traders Confuse the Most

Have you heard of KDJ? This technical indicator can be intimidating because it has 3 different lines, but in reality, it's quite simple: it's basically the Stochastic with a “J” that moves much more.

How it works in practice:

The 3 lines (K, D and J): Think of it this way: K and D are the “gentle lines” that track the price, while J is that hyper friend who moves faster and gives more aggressive signals.

When to enter and exit:

• J above 80 = market is VERY hot (overbought) → prepare for a drop
• J below 20 = market too cold (oversold) → it may be time to buy
• K crosses D from bottom to top = buy ( price may rise )
• K crosses D from top to bottom = sell ( price may fall )

Important notice: KDJ alone is weak. Use it together with RSI or MACD to confirm before putting in money. Many people lose by relying on a single technical indicator.

In summary: KDJ helps you pick entry and exit points by identifying when the market is overbought or oversold. But use your brain, not just the indicator.