Fisher Transform: median price turned into a sharp oscillator over 9 bars, with a one-bar trigger line.
Overview
The Fisher Transform, by John Ehlers, turns price into a line with clear peaks and troughs. It plots in its own pane with a trigger line, which is the Fisher line from one bar earlier.
Colors follow direction: green while the Fisher line is above the trigger, red while below.
How it works
First, median price (high + low) / 2 is placed in its 9-bar high-low range and scaled to between -1 and +1, with some smoothing. Then Fisher = 0.5 x ln((1 + x) / (1 - x)), also smoothed with its prior value.
This stretches values near the edges, so turning points stand out.
How to use it
- Some traders watch the Fisher line crossing its trigger as a turn signal.
- Use extreme readings as a sign a move is stretched.
- Look at how sharp the peaks are to see how strong a swing was.
- Pair it with a trend filter to avoid reading every swing.
These are ways some traders read it, for learning. They are not trade signals.
Settings
| Setting | Default |
|---|---|
| Settings | |
| LengthLookback period used to locate the median price hl2 within its highest-lowest range. Ehlers' original length is 10; 9 is the common platform default. | 9 |
| Style | |
| Fisher LineColor of the Fisher line when it sits exactly on its trigger. | #787b86 |
| Trigger LineColor of the trigger line, the Fisher value one bar back. | #787b86 |
| BullishColor of the Fisher line and fill while it is above the trigger. | #089981 |
| BearishColor of the Fisher line and fill while it is below the trigger. | #f23645 |
Alerts
You can alert on its line crossing a value or the candle close (from the chart's + menu); checked while ZoroCharts is open.
Notes and limits
- Works on any symbol and timeframe; it only needs candle data.
- It reacts fast and can give many turns in choppy markets.
Education only. Not financial advice. Indicators mark what happened on the chart; they do not predict what price will do. Trading futures, forex, crypto and other markets carries a high level of risk and may not be suitable for everyone.