Combining TEMA and Fisher Transform for Trend and Momentum Signals
Summary
This strategy combines Triple Exponential Moving Average (TEMA) with the Fisher Transform to align a trend signal with a momentum signal. A long entry requires price to cross above TEMA while Fisher crosses above zero; a short entry requires both to cross downward. Long positions close on a downward cross of either signal, and short positions close on an upward cross. The document gives default periods for the indicators and describes how TEMA is constructed from successive exponential averages.
The rationale is that TEMA responds faster than a conventional moving average while Fisher may clarify momentum changes. The document provides no measured strategy results, although it lists an ETH/USDT spot-market test setup covering about a year on daily bars. It cautions that the signals can whipsaw in sideways markets, that TEMA still lags, and that outcomes depend on parameter settings and market conditions. Suggested additions include volatility and volume filters, time filters, and trailing exits; these are proposals rather than tested improvements.
Key ideas
- A long entry requires price to cross above TEMA and Fisher to cross above zero.
- A short entry requires price and Fisher to cross below their respective thresholds.
- Either indicator reversing its direction can trigger an exit from an open position.
- The document presents TEMA as a lower-lag trend measure and Fisher as momentum confirmation.
- Sideways markets, residual lag, and parameter sensitivity are cited risks; no strategy performance results are reported.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.