Binary and Forex Trading Strategies Using KDJ Indicators

How to Read and Use KDJ Indicators

To be able to make a profit on business or investment trading, be it forex trading, stocks or binary options, we must use strategies to be able to profit consistently.

There are so many kinds of trading strategies that can be used to predict price movements as a point to enter the market or open a trading position.

On this occasion I will share technical analysis strategies using indicators.

Recently on the trading platform IQ Option has added 4 types of the latest indicators to help traders analyze price movements.

One of them is the KDJ indicator. Designed to help traders as effectively as possible and of course this indicator is worthy of your try.

The KDJ indicator is effective in determining the optimal trend and entry point, so that it can be used to help determine when the right moment to open a trading position.

For those of you who are accustomed to using technical analysis, the KDJ indicator will look familiar and like the Alligator and Stochastick Oscillator indicator combination.

This combination is very helpful in determining the direction of the trend or strength and also the optimal entry point.

The KDJ indicator is more effectively used in trending price movements and is less effective in flat or sideways price movements.

In accordance with the name of the indicator, KDJ indicator consists of 3 lines (K, DJ) and 2 levels (overbought and oversold).

The K and D lines are the same lines as the lines on the Stochastic Oscillator indicator. And line J is the difference from the value of D and K.

Conversion from the line will indicate a signal or opportunity to open an open trading position.

Same as in the Stochastic Oscillator indicator, there are oversold levels and overbought levels according to the time when trend movements tend to reverse or reversal.

By default these levels are set at 20% and 80%, but you can still change or adjust according to your wishes.

How to use KDJ indicator?

How to install KDJ indicator is very easy, namely:

1. Select an indicator from the list of indicators

2. Select the KDJ indicator

3. The most important indicator line color is to remember the J line color, because this J line will be used as a benchmark. In this tutorial I change the J line color to Blue.

4. This is how it looks on the chart


Following is the trading strategy using the KDJ indicator:

Open Signal Position CALL / BUY or Rise:

  • When the line meets below the OVERSOLD level
  • And the J (Blue) line intersects the other lines (D and J) moving from the bottom up

Open Position PUT / SELL signal or Down:

  • When the line meets above the OVERBOUGHT level
  • And the J (Blue) line intersects the other lines (D and J) moving from top to bottom

Usually for trading binary options with an expiration time of about 1 minute, I use a 15 second candlestick time interval and a 15 minute time frame and 5 minutes to do the analysis.

For trading with another period of time, please experiment to adjust to your trading style.

For more optimal analysis results it is recommended to be combined with other indicators such as ADX indicators and ATR indicators.

So that it can provide a more optimal signal about the reversal of future trends and be able to determine market volatility because the KDJ indicator does not work on market movements that are sideways or flat.

Please note that none of the indicators can provide 100% accurate signals from time to time. Even the best. Therefore, don't forget to follow risk management and capital allocation.

Hopefully the trading strategy tutorial using this KDJ indicator is useful for you in achieving profit consistently.


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