Fisher trading strategy

Strict adherence to the Forex trading strategy, as well as the rules of money management, are the unshakable rules of trading, without which not a single market participant has yet become successful.

The Fisher trading strategy is one of the most common in trading on the foreign exchange market.

It is based on the well-known Fisher oscillator, which in turn has been used by traders for many years. 

There is always a lot of discussion around this indicator, since it is prone to redrawing. However, if you have ever worked with any oscillator, you would have noticed that its readings change as quickly as the price moves.

Therefore, this disadvantage is at the same time an advantage since your signals will always be relevant, and you can clearly see any deviation from the indicator readings.

  The Fisher trading strategy is designed for trading the euro/dollar currency pair, but you can use it on any currency pair. This is due to the fact that the components of the strategy are technical indicators without reference to any currency pair.

The strategy can be used both for scalping on a five-minute chart and for trading on higher time frames. Therefore, I can say with confidence that the strategy is multifunctional and multicurrency.

Before you start analyzing signals, you need to establish its components. To do this, at the end of the article, download the archive with indicators and a template inside. Next, through the file menu, enter the data directory of the trading terminal and place the indicators in a folder called indicators, and the template in the template folder. Afterwards, you should restart the trading terminal and enter the templates and open the template called Fisher. The terminal work area should look like this:

 The trading strategy is based on two indicators: Fisher and Varmov. You can observe the Fisher indicator itself in the first two additional windows in the form of a blue and pink histogram. The strategy uses two fishers with different periods, namely 55 and 10. This is necessary in order to have a current picture of the market and a more global trend before your eyes. Thus, both indicators filter each other’s signals, and are also used with a higher time frame to exit a position.

The second Varmov indicator is a trend indicator based on a moving average and looks like blue and pink dots above and below the price. The strategy uses it as a trend filter. In general, all indicator settings are open, so you have a wide range of opportunities to optimize the strategy to suit your trading style. The balance of the strategy indicators is also visible to the eye, which allows you to filter out both trend movements and flats . And now briefly on the signals of the trading strategy.

Signals to enter the market according to the Fisher strategy.

We enter a sell position while simultaneously observing a number of the following signals:

1. The Varmov indicator draws a pink dot.

2. In the first additional window, Fischer is colored pink.

3. In the second additional window, Fischer is colored pink.

Attention! The Fisher indicator is redrawn, so we enter a position only on a closed bar! An example of entering a sell position is shown in the picture below:

 We enter a buy position while observing a number of the following signals:

1. The Varmov indicator draws a blue dot.

2. In the first additional window, Fischer is colored blue.

3. In the second additional window, Fischer is colored blue.

Attention! The Fisher indicator is redrawn, so we enter a position only on a closed bar! An example of entering a buy position is shown in the picture below:

 It is necessary to exit a position according to the rules of the strategy when an opposite signal appears in the first additional window of the Fisher indicator. You can also exit a position if the Varmov indicator point changes to the opposite one to the main signal.

The stop order must be placed near local minimums and maximums . If you find it difficult to find such levels, you can use the Parabolic or Fractal indicator. An example of setting a stop order and the moment of exiting a position can be seen in the picture below:

If we consider the advantages of the strategy, we can highlight the fact that we have clear rules for entering a position, exiting, and also setting stop orders.

It is important that the strategy consists of only two indicators, but its profitability and functionality are not lost. So you have a great backbone on which you can build your own trading strategy. Download the necessary tools for the Fisher strategy