Description:
The Fisher Transform is a technical analysis indicator developed by John F. Ehlers, an accomplished engineer and author in the field of market analysis. This innovative indicator aims to convert price data into a Gaussian normal distribution, making it easier for traders and investors to identify potential turning points and trends in asset prices.
Input Parameters:
- Length: Number of periods used in the calculation.
- Lower: Presets to -1.5 which represents the lower boundary of the indicator.
- LowerMid: Presets to -0.75 which represents the lower mid boundary of the indicator.
- Base: Paints a horizotonal level on the indicator at the given level.
- UpperMid: Presets to 0.75 which represents the upper mid boundary of the indicator.
- Upper: Presets to 1.5 which represents the upper boundary of the indicator.
Use Cases:
- Identifying Turning Points: One of the primary benefits of using the Fisher Transform is its ability to identify potential turning points in the price of an asset. By highlighting extreme price movements, the indicator can help traders and investors pinpoint when the market will likely change direction.
- Spotting Trends: Another advantage of the Fisher Transform is its capacity to show an asset’s price trend. By analyzing the direction of the Fisher Transform values, traders can determine whether the market is in an uptrend, downtrend, or experiencing a consolidation phase.
- Isolating Price Waves: By analyzing the peaks and troughs of the Fisher Transform values, traders can identify the underlying price waves that make up the overall market trend. This can assist in understanding the underlying market dynamics and may aid in identifying potential entry and exit points for trades.
This feature can be used in:
- Market Scanner
- Strategy Tester
- Multi-Factor Alerts
- Smart Checklist
Do you want to learn more? Check out our Learning Center Article.