EFS

for Trading Success

EFS Featured Studies of the Month:
The Fisher Transform and the Index of Chart Sentiment

The EFS library is full of new and useful strategies you can use for free in eSignal.

This month, we feature a study that identifies price reversals and another that identifies early stages of a trend.

The Fisher Transform

The Fisher Transform assumes that, although prices do not have a normal or Gaussian probability density function (the "bell-shaped curve"), you can create a nearly Gaussian probability density function by normalizing price (or an indicator such as RSI) and applying the Fisher Transform.

The signal line is the same indicator shifted back N periods. Fisher Transform has distinct turning points and a rapid response time. Use the peak swings to clearly identify price reversals.

Download the Fisher Transform EFS study

Index of Chart Sentiment (ICS)

The main challenge for technical indicators is identifying a trend in its early stages. The Index of Chart Sentiment (ICS) study was created to address this challenge. The ICS could reach very high levels, and this corresponds to an overbought market; very low values of the index correspond to an oversold market. When the index moves from lower to higher levels (period of bullish sentiment of the market) the dominant movement of the chart should be to the upside.

Download the Index of Chart Sentiment EFS study

Resources for EFS

• To access other EFS studies, visit the EFS Library (wait a few seconds for the Most Popular Articles listing to appear).
• For detailed tutorials on EFS, including how to implement EFS studies within eSignal, visit the Help Guides and Tutorials section of the EFS KnowledgeBase.