The KDJ indicator is a technical analysis tool used to assess market momentum and identify potential trend reversals. It is composed of three lines: the %K line, the %D line, and the %J line. The %K line is a sensitive measure of market momentum, while the %D line is a moving average of the %K line. The %J line represents the divergence of the %K line from the %D line. The KDJ indicator operates on a scale of 0 to 100, with values above 80 indicating overbought conditions and values below 20 suggesting oversold conditions. The KDJ indicator is used to generate trading signals and can help identify potential buy and sell opportunities based on the strength of price movements and the disparity between the %K and %D lines.
