K Value (KDJ) and RSI Difference Exceeds 30, Essentially Indicating Severe Imbalance in Market Bullish and Bearish Momentum, Extreme Divergence in Indicators, Triggering "Mean Reversion," Leading to Price Rebound or Pullback.

1. Understand the Two Indicators First
K Value (KDJ):
Range 0–100, Reflects Short-term Price Position and Momentum
>80: Overbought (Overheated); <20: Oversold (Overly Dropped)
RSI (Relative Strength Index):
Range 0–100, Reflects Strength of Bullish and Bearish Forces
>70: Overbought (Excessive Buying); <30: Oversold (Exhausted Selling)
2. Difference > 30: Two Typical Situations
1. Rebound Signal: K Value Very Low, RSI Very High (Difference > 30)
Pattern: K <20 (Oversold), RSI >50 (Relatively Strong)
Meaning:
K Value: Price Has Severely Dropped, Short-term Bearish Momentum Exhausted
RSI: Medium to Long-term Bullish Power Still Present, Downward Momentum Insufficient
Conclusion: Bears Overly Exhausted, Bulls Ready to Strike Back → Rebound
2. Pullback / Correction Signal: K Value Very High, RSI Very Low (Difference > 30)
Pattern: K >80 (Overbought), RSI <50 (Relatively Weak)
Meaning:
K Value: Price Has Severely Overbought, Short-term Bullish Momentum Exhausted
RSI: Medium to Long-term Bearish Power Still Present, Upward Momentum Insufficient
Conclusion: Bulls Over-Consumed, Bears Ready to Strike Back → Pullback / Correction
3. Why Does Difference > 30 Trigger Reversal?
Indicator Divergence (Core)
K (Short-term) and RSI (Mid-term) Move in Opposite Directions, Indicating Trend Momentum Breaks
Short-term and Mid-term Market Directions Conflict, Must Be Repaired by Price Reversion
Resonance of Overbought and Oversold Conditions
When Difference > 30, at least one indicator is in an extreme zone (K<20 or K>80)
Overbought Must Correct, Oversold Must Rebound (Mean Reversion Principle)
Imbalance of Bull and Bear Forces
K High, RSI Low: Short-term Buying Overheated, Medium-term Selling Heavy → Bulls Unable to Continue Rise
K Low, RSI High: Short-term Selling Exhausted, Medium-term Buying Strong → Bears Unable to Continue Drop
4. Practical Judgment (Quick Memory)
Rebound: K <20, RSI >50, Difference >30 → Oversold + Bullish Dominance → Rebound
Pullback: K >80, RSI <50, Difference >30 → Overbought + Bearish Dominance → Pullback
5. Precautions
Not 100%: Strong Trends May Cause Indicators to Become Less Responsive, Difference Continues to Widen
Must Combine with Trend: Bull Market Looks for Overbought, Bear Market Looks for Oversold
Coordinate with Volume and Price: Breakouts with Volume / Breakdowns at Key Levels Are More Effective
Summary in One Sentence: K and RSI Difference > 30 = Extreme Divergence Between Short-term and Mid-term Momentum → Market Self-corrects → Rebound or Pullback.

Rebound and Pullback Trading Method: Show Overbought/Oversold Shadow Bars on Main and Sub Charts; Wait for Shadow Bars to Complete, then Enter Based on the Color of the Candle (Yellow for Long, Gray-Blue for Short, Based on Sub Chart Time Frame).
Follow the Trend: On Larger Timeframes, When the Sub Chart Reaches the Top, and on Smaller Timeframes, When Trend Bullish or Bearish Signals Appear, Enter, Strictly Follow Stop-Loss and Take-Profit Levels!

Numerical Precautions: K Value Yellow Line, RSI Purple Line (Difference Between the Two)
K > RSI, RSI Not Crossing Midline, K Overbought, Price Likely to Drop, Expect a Pullback Value
K < RSI, RSI Crossing Below Midline, K Oversold, Price Likely to Rise, Expect a Rebound Value
(The Larger the Numerical Difference, the Higher the Accuracy, Suitable for Timeframes Above 5 Minutes)
Yellow Text for Bull/Bear: Signal Without Delay, Real-time Orders, Stop-Loss at Previous High/Low (Mainly 15-Minute and 1-Hour Charts, Confirm Signals with Sub Chart K Line Coloring)
Check the Level on the Sub Chart, Find Entry Points on Smaller Timeframes!