Fisher Transform (FISH)
December 28, 2008
Definition:
Fisher Transform (FISH) is based on the article “Using The Fisher Transform” by John Ehlers that will be available in the November 2002 issue of Stocks and Commodities Magazine. FISH has sharp and distinct turning points that occur in a timely fashion.
Interpretation:
It is based on the assumption that prices do not have a Gaussian probability density function (PDF), but you can create a nearly Gaussian PDF for prices by normalizing price, or an indicator such as RSI, and applying the Fisher Transform. The resulting peak swings clearly identify price reversals.
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