Smoothing RSI in an Ehlers Fisher Transform Indicator

Summary

This indicator description explains a modified Ehlers Fisher Transform applied to RSI. The transform is intended to normalize RSI values and make market conditions easier to identify. The modification smooths the RSI input to filter some small or insignificant changes before applying the transform.

Users can choose among simple, exponential, smoothed, or linear weighted moving averages for the smoothing step. An optional floating-level feature is also described; setting its period to one or less switches it to fixed levels when floating levels are disabled. The suggested use is to treat indicator color changes as signals. The document provides no tested rules for entries or exits, performance evidence, instrument or timeframe guidance, or discussion of false signals, so color changes should be understood as a proposed signal convention rather than a validated strategy.

Key ideas

• The indicator applies a Fisher Transform to RSI values to make their behavior easier to interpret.
• Smoothing the RSI input is intended to reduce insignificant fluctuations.
• Four moving-average types are available for smoothing.
• Levels can be floating or fixed, depending on the option and period setting.
• Color changes are presented as potential signals, without performance evidence or detailed trading rules.

Tags

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