Fisher Transform

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.

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).

• 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

Buy signals

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

Sell signals

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

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

| 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 |

• 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