Inverse Fisher Transform
A compressive transform that forces oscillator values towards +1 or -1, creating clear buy/sell signals.
Usage
Apply to RSI or other oscillators to rescale them to a ±1 range with sharp threshold behaviour. Values near ±1 indicate high-confidence overbought/oversold conditions.
Background
The Inverse Fisher Transform maps input values to (-1, +1) via a hyperbolic tangent function. Ehlers uses it in Cybernetic Analysis to create oscillators whose output clusters near the extremes, making crossovers of fixed thresholds reliable trading signals.
Formula
\[
IFT(x) = \frac{e^{2x} - 1}{e^{2x} + 1} = \tanh(x)
\]