KDJ Indicator: How Not to Get Lost in Charts

If you've ever looked at cryptocurrency charts and seen three lines dancing together, it was probably the KDJ indicator. Let's simplify this.

What are these 3 lines?

The KDJ is basically the more sensitive cousin of the Stochastic. While that one stays calm, the KDJ comes with a third character ( the J line ) that moves faster and shouts “hey, look at me!” when something important is happening.

The K and D Lines: Track the price in a calmer and smoother manner.

The J Line: It is the market thermometer. When it rises too much (above 80), the asset is burning = overbought. When it falls too much (below 20), it is frozen = oversold.

How to use it to make money?

1. Overbought/Oversold: J above 80? Prepare for a drop. J below 20? A rise may be coming.

2. Crossings: When K crosses D from bottom to top = green signal (buy). K crosses D from top to bottom = red signal (sell).

3. Golden Rule: Don't put all your money in KDJ alone. Combine it with RSI or MACD to be sure. It's like getting a second opinion from a doctor before surgery.

TL;DR: KDJ helps you not to buy at the top or sell at the bottom. Use the line crossovers as a compass and always validate with other indicators.