Fisher Transform Indicator for Identifying Potential Turning Points

Summary

This document presents the Fisher Transform as an indicator intended to highlight potential market turning points. It describes a lookback window applied to median price, normalizes the current price within the window’s high and low, smooths the normalized value recursively, and applies a logarithmic transformation. The indicator output is accompanied by a one-bar lagged trigger line and fixed overbought and oversold reference levels; the example parameters use a 13-period length and levels of 5 and -5.

The material is an indicator definition and code listing, not a strategy evaluation. It provides no charts, market-specific examples, backtest results, or guidance on entries, exits, or risk controls. The stated turning-point purpose should therefore be treated as an intended use rather than demonstrated predictive performance. The recursive calculation and dependence on a rolling price range also mean users would need to assess behavior across instruments and parameter choices before relying on it.

Key ideas

• The Fisher Transform is presented as an indicator for possible turning points.
• It normalizes median price against the high and low over a lookback window, then smooths and transforms the value.
• A lagged trigger series accompanies the indicator, along with fixed overbought and oversold levels.
• The document provides no empirical evidence that the indicator predicts reversals.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.