KD (KDJ) stochastic indicator: calculation and reading

KD shows where the close sits within the high-low range of a recent period.

Updated：2026-11-08

First, RSV

RSV = (today’s close − lowest low of the last 9 days) ÷ (highest high of the last 9 days − lowest low of the last 9 days) × 100. It ranges from 0 to 100: the closer to 100, the closer the close is to the high of the period; the closer to 0, the closer to the low.

Then smooth into K and D

• K = 2/3 of the previous K + 1/3 of today’s RSV.
• D = 2/3 of the previous D + 1/3 of today’s K.
• J = 3K − 2D, more sensitive than K and D and able to go beyond 0 to 100.

K and D usually start at 50. The smoothing parameter defaults to 3 (the 1/3 above), and you can change it on this site.

How to read it

• Common reference lines are 20 and 80: K and D below 20 are called the low zone (oversold area) and above 80 the high zone (overbought area). This only describes where the value is; in a strong trend KD can stay in the high zone for a long time.
• K crossing above D is called a golden cross; crossing below is a death cross.

Limits

KD depends on the high-low range of the last 9 days, and in sharp rallies or sell-offs it can get stuck near 0 or 100. It describes where the price sits in the range now and does not predict.

Origin

The stochastic oscillator was introduced by George Lane; adding the J line (KDJ) is common in Taiwan and other Asian markets. This article explains it in our own words.

This article only explains the calculation and how to read a chart. It is not investment advice.