Fisher Transform - Fisher | TR

🎯 Overview
Fisher Transform - Fisher | TR is a sophisticated momentum oscillator that applies the Fisher Transform to normalize price data, creating a Gaussian probability distribution that more clearly identifies price reversals and trend strength. Developed by Tiagorocha1989, this indicator enhances the classic Fisher Transform with dual-mode operation and comprehensive visual customization, making it ideal for traders seeking early reversal signals with reduced lag.

🔧 How It Works
The Fisher Transform assumes that price distributions are non-Gaussian and applies a mathematical transformation to create a nearly Gaussian distribution. This process makes extreme price movements more visible and creates clearer turning points.

Core Calculation Logic:
The indicator first normalizes the chosen price source within its highest and lowest range over a user-defined period, creating a value between negative one and positive one. This normalized value then undergoes the Fisher Transform, which amplifies extreme movements while compressing middle values.

A recursive smoothing formula creates the final Fisher lines, with two distinct lines generated for comparison. When operating in Normal mode, signals are generated based on the relationship between these two Fisher lines. In Fisher MA mode, the indicator applies a moving average to the Fisher value, creating signals when the Fisher line crosses this average.

✨ Key Features
🔹 Dual Operating Modes
Normal Fisher: Classic implementation using the two Fisher lines for signal generation, providing the traditional Fisher Transform experience

Fisher MA Mode: Enhanced version using a smoothed Fisher line against a user-selectable moving average for cleaner, more filtered signals

🔹 Flexible Moving Average Selection
Choose from six MA types for the Fisher MA mode, including Exponential, Simple, Rolling, Weighted, Volume-Weighted, and Hull Moving Averages, allowing fine-tuning for different market conditions and trading styles.

🔹 Customizable Color Themes
Eight distinct color schemes to match your charting preferences, ranging from Classic green and red to Modern white and purple, Robust amber and maroon, Accented violet and pink, Monochrome grayscale, Moderate green and red, Aqua blue and orange, and Cosmic pink and purple.

🔹 Comprehensive Visual Feedback
The indicator provides rich visual information including colored Fisher lines that change based on trend direction, fill zones showing the relationship between lines, gradient fills highlighting overbought and oversold conditions, color-coded candles that reflect current trend direction, and clear signal markers at crossover points.

🔹 Live Value Display
A floating label shows the current Fisher value on the chart, providing immediate awareness of market conditions without cluttering the workspace.

🔹 Ready-to-Use Alerts
Built-in alert conditions for both operating modes trigger LONG signals on bullish crossovers and SHORT signals on bearish crossunders, ensuring you never miss a potential trade setup.

⚙️ Settings Summary
Color Choice: Select from eight visual themes (Default: Classic)

Normal Fisher: Toggle between Normal and MA mode (Default: Enabled)

Fisher Length: Lookback period for price range calculation (Default: 41)

Fisher Source: Price source for calculations (Default: HL2)

Entry/Exit Signal: Choose signal type between zero line or Fisher MA (Default: Zero Line)

Length Fisher MA: Moving average period for Fisher MA mode (Default: 365)

Fisher MA Type: Moving average calculation method (Default: EMA)

📈 Practical Applications
🔹 Early Reversal Detection
The Fisher Transform's mathematical properties make it exceptionally sensitive to price turning points, often signaling reversals before they're visible on price charts. This early warning capability gives traders a significant advantage in capturing trend changes.

🔹 Trend Strength Assessment
The separation between the Fisher lines indicates momentum strength. Widening separation suggests a strengthening trend, while narrowing separation indicates weakening momentum. Crossovers between the lines signal potential trend reversals.

🔹 Divergence Trading
Look for divergences between Fisher line direction and price action. Bullish divergence occurs when price makes a lower low while Fisher makes a higher low, suggesting underlying strength. Bearish divergence appears when price makes a higher high while Fisher makes a lower high, warning of potential weakness.

🔹 Mean Reversion Opportunities
The indicator includes built-in overbought and oversold visualization through gradient fills. Values above certain thresholds suggest overextended bullish conditions ripe for a pullback, while values below thresholds indicate oversold conditions that may see a bounce.

🔹 Multi-Timeframe Analysis
The normalized nature of the Fisher Transform makes it suitable for comparing readings across different timeframes, helping identify confluence for stronger trade setups and filtering out weaker signals.

🎯 Ideal For
✅ Swing Traders seeking to capture trend reversals at inflection points

✅ Momentum Traders wanting to ride trends while Fisher lines remain separated

✅ Divergence Traders looking to identify hidden reversal signals

✅ System Developers needing reliable crossover logic for automated strategies

✅ Multi-Timeframe Analysts comparing normalized readings across periods

📌 Key Takeaways
Mathematically Superior: The Fisher Transform creates a Gaussian distribution from non-Gaussian price data, making extreme moves more identifiable than traditional oscillators

Dual-Mode Flexibility: Choose between classic implementation for maximum sensitivity or MA-smoothed version for cleaner signals based on your trading style

Early Signal Generation: Often leads traditional oscillators in identifying trend changes, providing earlier entry opportunities

Comprehensive Visualization: Color themes, fills, candles, and labels provide immediate trend awareness without cluttering the chart

Alert-Ready: Built-in alerts for both LONG and SHORT signals across both operating modes ensure you never miss a setup

⚠️ Important Notes
The Fisher Transform can be sensitive to parameter choices; experiment with length settings for your specific timeframe and market. Signals work best in trending markets; consider adding filters for ranging conditions. The 365-day MA default in Fisher MA mode is designed for longer-term trend context on daily charts. Always combine with proper risk management and additional confirmation for best results.

Disclaimer: This indicator is provided for educational and informational purposes only. Past performance is not indicative of future results. Always conduct thorough testing and align with your risk management strategy before live deployment.