Ehler Fisher Transform Analysis & Ehlers Fisher Transform Trading Signals
Developed by John Ehler,
Originally used to trade Stocks & Commodities Market.
Ehler Fisher Transform has two lines, the Fisher Transform line & the signal-line: signals are generated when there a cross-over 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 & sharp, distinct turning points making it a leading indicator.
This indicator is based on the assumption that 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.
Ehlers Fisher Transform
Trading Analysis and Generating Signals
Trading signals can be generated with pin-point accuracy by using the cross-over points of the Fisher Transform and its signalline.
However, this Ehlers Fisher Transform isn't very accurate, as with all leading technical indicators, it gives many false signals and it's prone to whipsaws, it's therefore recommended to trade it in combination with other trading indicators.
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