The Kdj indicator is a technical analysis tool used in trading to identify momentum and potential turning points in a security’s price trend. this indicator works exactly like an Alligator Indicator and is often used in conjunction with other indicators to confirm trading signals. You can easily find and set this indicator on the IQ option trading platform.
What is the KDJ indicator?
Kdj indicator also known as the Random index is one of the most popular indicators widely used in long time frame charts. this indicator works exactly like an Alligator indicator and also has three moving average lines named K, D, & J. where, Line K is calculated by comparing the current closing price of the security to its highest and lowest price over a set period, usually 14 periods. Line D is a three-period moving average line which helps to smooth out the indicator and make it easier to read. Line J represents the divergence of the D value from the K. line K and D intersect each other which helps traders to identify upcoming trends and reversals.
- The KDJ indicator is a momentum oscillator that compares the closing price of the security to the price range over a period of time.
- It is made up of three lines: K, D & J.
- Line K measures the current price relative to the highest price and lowest price over a specific period of time usually 14 days.
- Line D is a three-period moving average of line k, which helps to smooth out the indicator and makes it easier to read.
- Line J is then calculated by subtracting line D from three times line K.
How to configure the Kdj indicator on the IQ option?
Firstly open your IQ option chart. in case you don’t have one fill out the form below.
Secondly, click on the indicators button at the bottom of the chart. select trend from the drop-down menu and search for the Kdj indicator in the list and click the name.
As I said above Kdj indicator has three lines. and you can change the colour of the lines by clicking on the gear icon next to the indicator name.
How to trade with KDJ Indicator on IQ Option?
Trading with the KDJ indicator is very easy. this indicator works exactly like an Alligator indicator and has overbought and oversold levels. when the line K, D & J intersect each other. it helps the trader to identify upcoming trends and reversals.
When the three lines intersect each other below the oversold level (line 20). wait for line J (blue line) to intersect the other two lines from the bottom. it signals an upcoming bullish trend and here we can place a buy trade.
Similarly, when the three lines intersect each other above or near the overbought level (line 80). wait for line J (blue line) to intersect the other two lines from the top. it signals an upcoming bearish trend and here, we can place a sell trade.
So, this is the end of this article. I hope you have found this article helpful. if you still have any issues do comment below and try this indicator on the IQ Option demo account and see how this indicator behaves for you.
Wish you all the best 🙂