Ehler Fisher Transform Oil Technical Analysis & Ehler Fisher Transform Trading Signals

Developed by John Ehlers,

Originally used to trade Stocks and Commodities Market.

Ehler Fisher Transform has two lines, the Fisher Transform line and the signal line: signals are generated when there's a cross over of these two lines which looks like the stochastic oscillator.

It was designed to define major crude oil price reversals using the rapid response time & sharp, distinct turning points making it a leading indicator.

This oil indicator is based on the assumption that crude trading prices do not have a Gaussian probability density function (bell shaped curved movement), but that by normalizing crude oil price and applying the Fisher Transform you can create a nearly Gaussian probability density function on the lines drawn.

Ehler Fisher Transform

Crude Oil Technical Analysis & How to Generate Trading Signals

Trading signals can be generated with pin-point accuracy by using the cross over points of the Fisher Transform & its signal line.

However, this Ehler Fisher Transform isn't very accurate, as with all leading technical indicators, it gives many false signals & it is prone to whipsaws, it is therefore recommended to trade it in combination with other technical indicators.