KDJ Oscillator: RSV, Smoothed K and D Lines, and Histogram

Summary

The document explains the KDJ indicator’s calculation from a recent price range. It finds the highest high and lowest low over the selected period, then expresses the current close’s distance above the low as a percentage of that range. This raw stochastic value is the RSV line.

The RSV is averaged over a first smoothing period to produce K, then K is averaged over a second period to produce D. Their difference forms the KDJ histogram. The description provides the calculation concept but no trading rules, parameter recommendations, or performance evidence. It briefly mentions comparing KDJ with MACD, without giving a comparison method or conclusions, so the indicator’s usefulness and limitations as a signal are not assessed.

Key ideas

• RSV measures the close’s position within the high-low range over the selected lookback period.
• The K line smooths RSV, and the D line smooths K.
• The histogram is the difference between K and D.
• The document explains construction but does not establish entry rules or trading performance.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.