The Kurtosis Indicator is used to help determine market sentiment.
The Kurtosis Indicator is calculated in three parts.
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)
The Fast Kurtosis portion is calculated by the formula:
FK = n-periods moving average of K
The Fast/Slow Kurtosis portion is calculated by the formula:
FSK = n-periods moving average of FK
A buy signal occurs when the Kurtosis indicator crosses above zero and a sell signal occurs when the Kurtosis indicator crosses below zero.
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