What it is
The Fisher Transform is a technical oscillator developed by John Ehlers. It converts price data into a Gaussian normal distribution to identify significant trend reversals.
How it works
It normalizes prices relative to their highs and lows over a specific look-back period. By applying a mathematical transformation, it turns price action into sharp peaks, making turning points clearer than standard oscillators.
Trading signals
- Bullish: When the Fisher line crosses above the signal line from below zero.
- Bearish: When the Fisher line crosses below the signal line from above zero.
- Extremes: Values above +2 or below -2 suggest overbought or oversold conditions.
Basic settings
The default length is typically set to 9 periods. Traders can adjust this length to increase sensitivity or reduce noise depending on their timeframe. This indicator is for educational purposes only, not financial advice.
