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SKDJ Bottom-Top Reversal Indicator

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SKDJ Bottom-Top Reversal Indicator — Introduction (English Version)

The SKDJ Bottom-Top Reversal Indicator is an enhanced version of the classic Stochastic (K/D) oscillator.
It is designed to identify high-probability reversal zones, highlight momentum shifts, and help traders capture oversold bounces and overbought pullbacks with greater clarity.

This indicator smooths the standard RSV calculation with double EMA/MMA layers, producing a more stable K/D structure while maintaining sensitivity to short-term price swings. It plots dynamic green/red lines for visual clarity and provides automatic buy/sell markers based on extreme-zone crossovers.

🔍 Core Logic
1. RSV Calculation

RSV measures the close price relative to the highest and lowest prices within a lookback window:RSV=EMA((Close−Lowest(N)​)/(Highest(N)−Lowest(N))×100,M)
This normalizes the price position into a 0–100 range and applies smoothing to reduce noise.

2. K & D Lines

K Line = EMA of RSV

D Line = SMA of K

The combination produces a fast and slow stochastic pair that tracks short-term momentum shifts.

3. Reversal Signals

The indicator automatically highlights:

Buy Signal (Bottom Reversal):
When K < 25 and K crosses above D → potential oversold rebound.

Sell Signal (Top Reversal):
When K > 75 and D crosses above K → potential overbought correction.

These signals combine extreme price positioning + momentum crossover, giving higher-quality reversal points.

🎨 Visual Features

Green K-line for upward momentum

Red D-line for trend strength

Overbought (80) & Oversold (20) horizontal guides

Automatic triangle markers for buy/sell signals

Optional background color shading

This clean visual design allows traders to read momentum more intuitively and react quicker to turning points.

🧩 Use Cases

The SKDJ indicator is ideal for:

Identifying short-term mean-reversion opportunities

Spotting early momentum reversal before large swings

Filtering entries inside range-bound markets

Confirming signals from other systems (MA, trendlines, volume)

It works on all timeframes and across stocks, crypto, forex, commodities.

📈 Why It Works

This indicator combines:

Price location (overbought/oversold range)

Momentum direction (K/D crossover)

Smoothed oscillation (less noise, cleaner signals)

The convergence of these three factors often precedes short-term market turning points.

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