Ehler Fisher Transform Indices Analysis and Ehlers Fisher Transform Trading Signals
Developed and Created by John Ehler,
Originally used to trade Stocks & Commodities Market.
Ehler Fisher Transform has 2 lines, the Fisher Transform line & the signal line: signals are generated/derived when there is a cross-over of these 2 lines which looks like the stochastic oscillator.
It was designed to define major price reversals using the rapid response time & sharp, distinct turning points making it a leading trading indicator.
This indicator is based on the assumption that the prices do not have a Gaussian probability density function (bell shaped curve movement), but that by normalizing price and applying the Fisher Transform you as a Stock Index trader can create a nearly Gaussian probability density function on the lines that are drawn.
Ehler Fisher Transform
Index Analysis & How to Generate Trading Signals
Trading signals can be generated with pin-point accuracy by using the crossover points of the Fisher Transform and its signalline.
However, this Ehlers Fisher Transform is not very accurate, as with all leading indicators, it gives many false signals & it's prone to whipsaws, it is thenceforth recommended to trade it in combination with other trading indicators.
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