Fisher Transform Trade

Entry Logic

• Exact Entry Trigger: Enter long when the Fisher Transform line crosses above its signal line. Enter short when it crosses below.
• Confirmation: The cross should happen after the Fisher has reached an extreme reading (e.g., above +1 or below -1).
• Timeframe: 5-minute, 15-minute.
• Market Condition: Potential reversal.

Exit Logic

• Profit Targets: Exit on the opposite signal line cross.

Stop Loss Structure

• Hard Stop: Place stop beyond the price extreme of the reversal.

Risk Management Framework

• Risk Per Trade: 0.75% of account capital.
• R:R Requirement: Minimum 1.5:1.

Position Sizing Model

• Sizing Approach: Fixed fractional.

Trade Filtering

• Market Conditions to Avoid: Strong trending markets.

Context Framework

• Range Location: Look for signals at the boundaries of a known range.

Trade Management Rules

• Take Profits: This is a reversal strategy; don_t expect a new trend.

Time Rules

• Optimal Window: During range-bound market conditions.

Setup Classification

• A+ Setup: A Fisher cross that occurs with a divergence at a major support/resistance level.

Market Selection Criteria

• Instruments: Any liquid instrument.

Statistical Edge Metrics

• Win Rate: 55-65%.
• Profit Factor: 1.5.
• Expectancy: 0.25R.

Failure Conditions

• Strategy Fails: When used to fade a strong, established trend.

Psychological Rules

• Discipline: Wait for the extreme reading before looking for a cross.

Advanced Components

• Filters: Combine with Bollinger Bands to identify range boundaries.

Location

• Strongest: For identifying short-term turning points within a trading range.