Basics:

Original Ehlers fisher transform is using an adjusted RSI in a fisher transform calculation in order to further normalize and emphasize the RSI values in order to be able to spot market conditions in easier way.

This version:

It is adding 2 steps:

  • floating levels usage option

  • in case that the floating level is not to be used, setting the floating level period to less than or equal to 1 will turn the level from floating to fixed levels

  • smoothing the RSI value (and that way it filters some of the possible insignificant changes

  • usual set of average types can be used for smoothing :

  • simple moving average (SMA)

  • exponential moving average (EMA)

  • smoothed moving average (SMMA)

  • linear weighted moving average (LWMA)

Usage:

You can use the color changes of the indicator as signals.