Inverse Fisher Transform COMBO STO+RSI+CCIv2 by KIVANÇ fr3762

The Inverse Fisher Transform COMBO indicator consolidates several popular oscillators modified by the Inverse Fisher Transform to provide clear, bipolar buy and sell signals on a single interface. By transforming the probability distribution of standard indicators, this tool helps traders identify turning points with higher precision and reduced lag.

Usage

The Usage section focuses on identifying overbought and oversold conditions through the lens of compressed oscillator values. The Inverse Fisher Transform (IFT) forces values to stay within a range of -1 to +1, creating sharp peaks that are easier to interpret than standard oscillators.

• Bullish Signals: A bullish entry is typically considered when the selected indicator line crosses above the -0.5 level. This suggests that the momentum is shifting upward from an oversold state.
• Bearish Signals: A bearish exit or entry is typically considered when the indicator line crosses below the 0.5 level. This suggests a transition from an overbought state to downward momentum.
• Indicator Selection: Users can toggle between individual IFT versions of the Relative Strength Index (RSI), Stochastic, Commodity Channel Index (CCIv2), and Money Flow Index (MFI).
• Averaging: The "Show Average" feature calculates the mean of all four transformed indicators, providing a composite view of market momentum to filter out noise from individual oscillators.

Details

Developed based on the principles established by John Ehlers, the Inverse Fisher Transform is used to modify the Probability Distribution Function (PDF) of an indicator. While standard oscillators often spend significant time in mid-ranges with ambiguous signals, the IFT is a compressive transform.

When the input values are processed through the IFT formula, the result is an output that has a high probability of being near +1 or -1. This "black-or-white" behavior makes the indicator ideal for timing decisions. The script applies a Weighted Moving Average (WMA) to the raw indicator data before the transform to further smooth the output and ensure the signals are reactive yet stable.

Settings

• Show INVERSE FISHER TRANSFORM on STOCHASTIC Line?: Toggles the visibility of the transformed Stochastic oscillator.
• Show INVERSE FISHER TRANSFORM on RSI Line?: Toggles the visibility of the transformed RSI.
• Show INVERSE FISHER TRANSFORM on CCI Line?: Toggles the visibility of the transformed CCI.
• Show INVERSE FISHER TRANSFORM on MFI Line?: Toggles the visibility of the transformed MFI.
• Show INVERSE FISHER TRANSFORM AVERAGE Line?: Displays a thick line representing the average value of all four active transformations.
• CCI Length: Determines the lookback period for the Commodity Channel Index calculation.
• Smoothing Length: Sets the period for the Weighted Moving Average (WMA) used to smooth the data before the transformation.
• RSI Length: Determines the lookback period for the Relative Strength Index.
• STOCH Length: Sets the lookback period for the Stochastic oscillator.
• MFI Length: Sets the lookback period for the Money Flow Index.

FAQ

How do I interpret the -0.5 and 0.5 levels? These levels act as the primary signal thresholds. Values above 0.5 indicate strong bullish momentum (often overbought), while values below -0.5 indicate strong bearish momentum (often oversold). Crosses back into the center from these extremes are used for timing.

Can I use multiple oscillators at the same time? Yes, the script allows you to overlay the IFT of the RSI, CCI, Stochastic, and MFI simultaneously, or use the "Average" line to see a confluence of all four.

How do I access the Inverse Fisher Transform COMBO? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.