The legendary woman who was reborn from the ashes

In the trading market, the KDJ indicator has helped us explore the trend of the market countless times. However, sometimes this indicator will "fail" and become blunt. So, how can we find a way out in this maze-like market? Let's explore the application and strategy of the KDJ indicator blunting phenomenon in actual combat.

KDJ indicator, also known as stochastic indicator, is a technical analysis indicator widely used by investors. It originated in the futures market and was later used for short-term and medium-term trend analysis of foreign exchange and stocks. It is the most commonly used technical analysis tool in the trading market.

The KDJ indicator calculates the immature random value of the last calculation period based on statistical principles through the proportional relationship between the highest price, the lowest price and the closing price of the last calculation period that have appeared in a specific period, and then calculates the K value, D value and J value based on the smoothed moving average method, and draws a curve chart to judge the market trend.

However, like all tools, the KDJ indicator also has its limitations. In certain stages of the market, such as when prices continue to rise or fall, the KDJ indicator may become blunt, that is, the indicator's response becomes slow. Many investors think that the buy and sell signals given by the indicator deviate from the actual trend. It's like walking in the fog and being unable to accurately judge the road conditions ahead.

Indicator passivation is a stock market jargon, which means that a certain indicator has been in an abnormal state. Taking the KDJ indicator as an example, all three lines of the indicator run to the top or bottom of the indicator and stick together. This state is the indicator passivation.

Due to the limitation of the indicator calculation principle, after the price continues to rise or fall for a period of time, the KDJ indicator will become slow to respond to the stock price. When the stock price continues to rise or fall again, the KDJ indicator has begun to react slowly. At this time, the indicator provides an unrealistic reference for our buying and selling decisions. This phenomenon is called the passivation of the KDJ indicator.

The passivation of the indicator is not unique to KDJ. There are similar phenomena in other indicators. It is not necessary to take unrealistic methods to damage the original flexible and accurate functions of the KDJ indicator in order to eliminate the passivation of the KDJ. In fact, as long as it is applied skillfully, the passivation of the KDJ indicator can also turn decay into magic. We can turn the passivation of the KDJ indicator into the best time to buy the bottom and escape the top.

The principle of indicator passivation:

When the indicator enters the vicinity of 80, it is easy to form a high-level passivation. The reason for the passivation is that the large cycle is in a strong area, or a golden cross has just been formed at a low level, and the large cycle cycle must be completed through the passivation of the small cycle;

Conditions for forming a new direction after passivation:

The indicator generally passesivates for 6-8 consecutive days to reach the condition of changing the trend. During this period, the three lines of KDJ always hover above 80, and the probability of forming a divergence increases;

Experienced investors can see at a glance that the dullness of an indicator is actually a signal that the market is about to turn.

So, how to identify and deal with this passivation phenomenon? First, we must learn to observe the trend of the KDJ indicator. When the K line, D line, and J line stick together at high levels (above 80) or low levels (below 20) to form a line, this is an obvious signal of the KDJ indicator passivation. It's like a car stuck in the mud and unable to move forward.

In the face of this situation, we don't have to panic too much. In fact, through clever strategy adjustments, we can turn the passivation of the KDJ indicator into the best time to buy the bottom and escape the top. When the KDJ indicator forms a passivation at a low level, it is like the darkness before dawn, heralding the arrival of the bottom.

We can combine other technical indicators and fundamental information to comprehensively judge the formation of the bottom and buy at the right time. Similarly, when the KDJ indicator is passivated at a high level, it is like the calm before the storm, indicating that the top is approaching. At this time, we should pay close attention to the trend of stock prices. Once we find the top signal, such as K-line pattern, trading volume, etc., we should sell out in time to avoid losses.

In addition, in order to improve the accuracy of judging the passivation of the KDJ indicator, we can also combine other technical indicators for analysis. For example, when the KDJ indicator forms a passivation at a low level, if the MACD indicator also shows a golden cross signal at the same time, the reliability of the bottom will be greatly improved. Similarly, when the KDJ indicator forms a passivation at a high level, if the RSI indicator also exceeds the normal range, the possibility of the top will increase.

In short, although the passivation of the KDJ indicator has brought some troubles to our transactions, as long as we master the correct identification methods and coping strategies, we can turn danger into safety and seize market opportunities. In this process, we need to keep a calm mind and keen observation, continue to learn and practice, and improve our trading skills.

Take the main board index of 2019 points on September 9, 16 as an example. At that time, the KDJ indicator formed a passivation at a high level, which was an obvious signal that the market was about to change. At this time, investors were like a detective soldier, smelling the nervous atmosphere of the market through the subtle changes of the KDJ indicator. Sure enough, not long after, the market sent out a top signal, and the J line in the KDJ indicator formed a dead cross downward, which meant that the prelude to the decline had been opened. By selling in time, the subsequent market decline was successfully avoided and possible losses were avoided.

This is the charm of technical analysis. It gives us the opportunity to capture those hidden but crucial information in the ocean of the market. However, to become a true market master, we also need to combine fundamental information, such as company financial reports, industry dynamics, etc., to make a comprehensive judgment. This is like an all-round athlete, who needs not only strength, but also speed and skills.

In the future investment career, we must always maintain the enthusiasm for learning and continue to explore new technical analysis methods and strategies. Only by continuous progress can we stay ahead in this ever-changing market environment.

Remember, investment is a marathon, not a 100-meter sprint. What we need is a steady pace, a calm mind, and a deep understanding of the market. Only in this way can we achieve long-term stable returns in the trading market and become the real market winner.

If you have solved the problem of direction, you can basically survive in the market. If you have solved the problem of entry and exit, you may achieve stable profits. If you further expand the cycle and fix the pattern, you will make a living by trading.