Ehler Fisher Transform Trading Analysis Signals
Developed by John Ehler,
Originally used to trade Stocks & Commodities Market.
Ehler Fisher Transform has two lines, the Fisher Transform line and the signalline: signals are generated when there is a crossover of these two lines which looks like the stochastic oscillator trading indicator.
It was designed to define major price reversals using the rapid response time and sharp, distinct turning points making it a leading technical indicator.
This indicator is based on the assumption that the prices do not have a Gaussian probability density function (bell shaped curved movement), but that by normalizing price & applying the Fisher Transform you can create a nearly Gaussian probability density function on the lines drawn.
Ehler Fisher Transform
FX Technical Analysis & How to Generate Signals
Trading signals can be generated with pin-point accuracy by using the cross-over points of the Fisher Transform & its signalline.
However, this Ehlers Fisher Transform isn't very accurate, as with all leading technical indicators, it gives many false signals & it's prone to fake outs, it's therefore recommended to trade it in combination with other technical indicators.
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