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KDJ Indicator

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The KDJ indicator is a technical analysis tool used to identify overbought and oversold conditions in the market, as well as potential trend reversals. It consists of three lines: the K line, D line, and J line. The K line is derived from the Exponential Moving Average (EMA) of the Relative Strength Value (RSV), which measures the closing price relative to the high and low over a user-defined period. The D line is the EMA of the K line, smoothing its movements. The J line, calculated as K + (K - D) × 2, amplifies the difference between K and D, making it more sensitive to price changes. Traders often use the KDJ indicator to spot divergences, crossovers, and extreme values (e.g., above 80 for overbought, below 20 for oversold) to make informed trading decisions. All parameters, including the RSV, K, and D periods, are customizable to suit different trading strategies.

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