Ehler Fisher Transform Technical Analysis and Ehler Fisher Transform Trading Signals

Created 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 is a crossover of these two lines which looks like the stochastic oscillator.

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

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

Ehler Fisher Transform

Trading 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 and its signal line.

However, this Ehler Fisher Transform is not 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 indicators.