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Using the Inverse Fisher Transform to Highlight RAVI Trend Changes

Notebook Stratmill research code

Summary

The Range Action Verification Index (RAVI) is described as a trend-detection indicator based on the percentage difference between current and past prices. The document gives threshold-crossing rules attributed to its developer: an upward cross of a 3% reference level marks the start of a bull trend, while a downward cross of a 1% level marks the start of a bear trend. It treats the respective trend as active while the indicator continues moving in that direction.

This version applies an inverse Fisher transform to RAVI values, with the stated aim of making trend changes and exhaustion easier to detect. The text says the indicator can be used in trending or counter-trending modes and recommends lower trigger settings for trending use. It does not define the exact calculation window, establish how to select thresholds across markets, or provide charts, backtests, or performance evidence. The rules are therefore guidance for interpreting an indicator, not evidence of a profitable standalone strategy.

Key ideas

  • RAVI measures the percentage difference between current and earlier prices to help identify trends.
  • The described bull signal occurs when RAVI crosses upward through a 3% reference level.
  • The described bear signal occurs when RAVI crosses downward through a 1% reference level.
  • An inverse Fisher transform is applied to emphasize values and make changes or exhaustion easier to identify.
  • The document gives no backtest results or evidence that the suggested thresholds generalize across markets.

Tags

Technical indicatorsTrend followingMomentum

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