The Kurtosis Indicator is used to help determine market sentiment.
Overview and Calculation
The Kurtosis Indicator is calculated in three parts.
1) The Kurtosis portion is calculated by the formula:
K = n-periods momentum – n-periods momentum of 1 bar ago (current bar’s momentum value minus the previous bar’s momentum value)
2) The Fast Kurtosis portion is calculated by the formula:
FK = n-periods moving average of K
3) The Fast/Slow Kurtosis portion is calculated by the formula:
FSK = n-periods moving average of FK
The Kurtosis Indicator on the a 4H USD/ZAR chart 4/16/2011
Source: VT Trader
Interpretation
A buy signal occurs when the Kurtosis indicator crosses above zero and a sell signal occurs when the Kurtosis indicator crosses below zero.
