Kurtosis Indicator

Kurtosis Indicator

This lesson will cover the following

  • Explanation and calculation
  • How to interpret this indicator
  • Trading signals, generated by the indicator

This indicator is purposed to identify market sentiment. It is calculated in three portions:

– The Kurtosis portion is calculated as follows:

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K = n-period momentum of the current bar – n-period momentum of the prior bar

– The Fast Kurtosis portion is calculated as follows:

FK = n-period moving average of K

– The Fast/Slow Kurtosis portion is calculated as follows:

FSK = n-period moving average of FK.

Trading signals are generated, when the Kurtosis indicator crosses its zero line. A signal to buy is generated, when the indicator crosses above the zero line. A signal to sell is generated, when the indicator crosses below the zero line.

Kurtosis Indicator
Chart Source: VT Trader