Skew Indicator Explained

Rolling Skew measures the asymmetry of recent movement: negative skew means the biggest bars were drops (grind up, fall hard); positive skew means the outliers were rallies. Two markets with identical volatility can carry opposite skew — and opposite risk.

How It Works

• Third-moment statistic of the window's returns.
• Negative: down-moves dominate the tails; positive: up-moves do.
• Persistent skew is a structural personality trait of a symbol.

How to Trade It

Respect skew in position design: in negative-skew regimes, longs need wider stops and faster profit-taking (the crash comes without warning). Skew flipping sign after a long regime is also an underrated early signal of changing market character.

Building It in Setup.Cash

Add Skew in the strategy builder — the length input controls its sensitivity — and use its value in any entry, exit, or filter condition. You can also combine it with other tools in the Indicators Lab or via the AI indicator generator. See Kurtosis for the size of the tails. For the full category overview, see the volatility & statistics library guide.

Volatility indicators qualify trades rather than generate them — backtest your system with and without this filter and compare the drawdowns.