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Fisher Volume Transform | AlphaNatt

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Fisher Volume Transform | AlphaNatt

A powerful oscillator that applies the Fisher Transform - converting price into a Gaussian normal distribution - while incorporating volume weighting to identify high-probability reversal points with institutional participation.

"The Fisher Transform reveals what statistics professors have known for decades: when you transform market data into a normal distribution, turning points become crystal clear."


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🎲 THE MATHEMATICS

Fisher Transform Formula:
The Fisher Transform converts any bounded dataset into a Gaussian distribution:

y = 0.5 × ln((1 + x) / (1 - x))


Where x is normalized price (-1 to 1 range)

Why This Matters:
  • Market extremes become statistically identifiable
  • Turning points are amplified and clarified
  • Removes the skew from price distributions
  • Creates nearly instantaneous signals at reversals


Volume Integration:
Unlike standard Fisher Transform, this version weights price by relative volume:
  • High volume moves get more weight
  • Low volume moves get filtered out
  • Identifies institutional participation
  • Reduces false signals from retail chop


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💎 KEY ADVANTAGES

  • Statistical Edge: Transforms price into normal distribution where extremes are mathematically defined
  • Volume Confirmation: Only signals with volume support
  • Early Reversal Detection: Fisher Transform amplifies turning points
  • Clean Signals: Gaussian distribution reduces noise
  • No Lag: Mathematical transformation, not averaging


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⚙️ SETTINGS OPTIMIZATION

Fisher Period (5-30):
  • 5-9: Very sensitive, many signals
  • 10: Default - balanced sensitivity
  • 15-20: Moderate smoothing
  • 25-30: Major reversals only


Volume Weight (0.1-1.0):
  • 0.1-0.3: Minimal volume influence
  • 0.5-0.7: Balanced price/volume
  • 0.7: Default - strong volume weight
  • 0.8-1.0: Volume dominant


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📊 TRADING SIGNALS

Primary Signals:
  • Zero Cross Up: Bullish momentum shift
  • Zero Cross Down: Bearish momentum shift
  • Signal Line Cross: Early reversal warning
  • Extreme Readings (±75): Potential reversal zones


Visual Interpretation:
  • Cyan zones: Bullish momentum
  • Magenta zones: Bearish momentum
  • Gradient intensity: Strength of move
  • Histogram: Raw momentum power


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🎯 OPTIMAL USAGE

Best Market Conditions:
  • Range-bound markets (reversals clear)
  • High volume periods
  • Major support/resistance levels
  • Divergence hunting


Trading Strategies:

1. Extreme Reversal:
Enter when oscillator exceeds ±75 and reverses

2. Zero Line Momentum:
Trade crosses of zero line with volume confirmation

3. Signal Line Strategy:
Early entry on signal line crosses

4. Divergence Trading:
Price makes new high/low but Fisher doesn't

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Developed by AlphaNatt | Quantitative Trading Systems

Version: 1.0
Classification: Statistical Transform Oscillator
Not financial advice. Always DYOR.

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