Mastering the KDJ Averages Indicator for MetaTrader 5

The KDJ Averages oscillator is a handy tool for traders looking to identify market entry points. Unlike the traditional KDJ, this version uses standard smoothing techniques, making its J line a tad quicker to respond under default settings.

Here’s a quick rundown of the six input parameters you’ll be working with:

KDJ Period - The time frame for calculating the KDJ indicator;
K Period - The time frame for the K line calculations;
K Method - The method used for calculating the K line;
D Period - The time frame for the D line calculations;
D Method - The method used for calculating the D line;
Threshold - This sets the signal line.

Calculation:

K = MA(RSV, KPeriod, KMethod)
D = MA(K, DPeriod, DMethod)
J = 3.0*D - 2.0*K

Where:

RSV = ((Close – Lowest Low) / (Highest High – Lowest Low)) * 100

Here, the Lowest Low and Highest High refer to the lowest and highest prices during the specified period.

Interpreting the Data: Watch for the J line as it crosses the Threshold level. A move upward suggests a selling opportunity, while downward movement indicates a good moment to buy.

Once the J line crosses the Threshold, keep an eye out for the K and D lines to follow suit. The direction they cross will guide your market entry decision.

Fig. 1. KDJ Averages

Fig. 2. KDJ Averages compared with KDJ

Mastering the KDJ Averages Indicator for MetaTrader 5

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