The MTTS Kurtosis Oscillator © measures market sentiment by identifying the “volatility of volatility” (i.e., a measure of risk based on the standard deviation of the asset return). This process is completed by gauging the fatness or skinniness of the tails of a probability distribution (i.e., bell curve) to take advantage of unusual trading opportunities in the market. This provides a way to find trading opportunities whenever the market is in an imbalance to go long or short in the market.
Application: When there is a spike in the Kurtosis oscillator ©, typically above 20 it indicates a potential trend shift or a significant move, Bear or Bull. The direction will be based on candlestick pattern. (i.e if the Kurtosis oscillator © has a spike above 20 and the candlestick pattern depicts a bullish move, a long position should be considered.