There seems to be several different formulas to calculate KDJ, however, i have yet to find this one on tradingview.
The background color is green when J>D and red when J<D. The idea being that when we go green we should buy and when red sell.
Let me know if you have any questions.
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.
// // @author iamaltcoin // // This KDJ indicator is a mimic of the same indicator on bitcoinwisdom // // This script is released free of charge with no warranty // Please leave a not to the author of this script if it is used // whole or in part // study("KDJ Indicator - @iamaltcoin", shorttitle="GM_V2_KDJ") ilong = input(9, title="period") isig = input(3, title="signal") bcwsma(s,l,m) => _s = s _l = l _m = m _bcwsma = (_m*_s+(_l-_m)*nz(_bcwsma))/_l _bcwsma c = close h = highest(high, ilong) l = lowest(low,ilong) RSV = 100*((c-l)/(h-l)) pK = bcwsma(RSV, isig, 1) pD = bcwsma(pK, isig, 1) pJ = 3 * pK-2 * pD plot(pK, color=orange) plot(pD, color=lime) plot(pJ, color=fuchsia) bgcolor(pJ>pD? green : red, transp=70)