Question 1

What is Fisher Transform?

Accepted Answer

The Fisher Transform is a technical indicator that converts price data into a Gaussian normal distribution. Developed by John Ehlers, it creates sharp turning points that clearly identify price reversals. The indicator is unbounded and oscillates around zero, with a trigger (signal) line for crossover signals.

Question 2

How it works

Accepted Answer

The Fisher Transform normalizes price, then applies the Fisher function: ``` Value = 0.5 * ln((1 + X) / (1 - X)) ``` where X is the normalized price (scaled to -1 to +1 range over the lookback period). The trigger line is the previous bar's Fisher value. Sub-component: `FISHER_TRIGGER` (signal line).

Question 3

Key features

Accepted Answer

- **Sharp peaks and troughs** — Clearer turning points than most oscillators - **Unbounded** — Can reach extreme values during strong moves - **Zero line** — Divides bullish from bearish territory - **Trigger crossovers** — Fisher crossing its trigger line signals entries

Question 4

Buy signals

Accepted Answer

- Fisher crosses above the trigger line from below - Fisher crosses above 0 (bullish shift) - Fisher turns up from an extreme negative value

Question 5

Sell signals

Accepted Answer

- Fisher crosses below the trigger line from above - Fisher crosses below 0 (bearish shift) - Fisher turns down from an extreme positive value

Question 6

Parameters

Accepted Answer

| Parameter | Default | Description | |-----------|---------|-------------| | Period | 10 | Lookback period for normalization |

Question 7

Example conditions

Accepted Answer

| Condition | Meaning | |-----------|---------| | `FISHER(10) > 0` | Bullish territory | | `FISHER(10) cross_over FISHER_TRIGGER(10)` | Buy signal (Fisher crosses trigger) | | `FISHER(10) cross_under FISHER_TRIGGER(10)` | Sell signal (Fisher crosses trigger) | | `FISHER(10) > 2` | Extremely bullish |

Question 8

Tips

Accepted Answer

- The Fisher Transform tends to produce cleaner signals than RSI or Stochastic - Extreme values (above 2 or below -2) often precede reversals - Works well on all timeframes but particularly effective on daily charts - Combine with support/resistance for high-probability entries - The trigger crossover is the primary signal — trade in the direction of the cross