The Smoothed Fisher Transform MT4 forex indicator is a popular trading oscillator composed of RSI and EMA.
The indicator fluctuates between 0 and 100 readings.
The oversold area is located between 0 and 12 readings while the overbought area is located between 88 and 100 readings.
Use this indicator together with a trend following indicator to built a complete trading solution.
Examples of good trend following indicators include moving averages, exponential moving averages and Ichimoku Kinko Hyo.
Next is to trade in the direction of the underlying trend as indicated by the trend following indicator.
Trend direction is up? Only take oversold signals from the Fisher and avoid the overbought signals.
Trend direction is down? Only take overbought signals from the Fisher and avoid the oversold signals.
The Fisher forex indicator can be used for scalping, day trading and swing trading purposes.
The EUR/USD H1 chart below displays the Smoothed Fisher Transform forex indicator in action.
Basic Trading Signals
Signals from the Smoothed Fisher Transform forex MT4 indicator are easy to interpret and goes as follows:
Buy Signal: Open buy position when the indicator turns back above the 12 level from below.
Sell Signal: Open sell position when the indicator turns back below the 88 level from above.
Trade Exit: Close the open trade when an opposite signal occurs, or use your own method of trade exit.
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart pattern
Customization options: Variable (RSI Period, EMA Period, Alerts) Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Copy and paste the smoothed-rsi-inverse-fisher-transform.mq4 indicator into the MQL4 indicators folder of the Metatrader 4 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL4 > Indicators (paste here)