*The Fisher Transform converts data to or from a Gaussian distribution. It was first used in algorithmic trading by John Ehlers (1) , and became a common part of indicators since then. In a TASC February 2022 article, Ehlers described a new indicator, the Elegant Oscillator, based on the Inverse Fisher Transform. Let’s have a look at this indicator and how it’s used in a trading system.*

# Tag: Fisher transformation

## Build Better Strategies! Part 2: Model-Based Systems

Trading systems come in two flavors: **model-based** and **data-mining**. This article deals with model based strategies. Even when the basic algorithms are not complex, properly developing them has its difficulties and pitfalls (otherwise anyone would be doing it). A significant market inefficiency gives a system only a **relatively small edge**. Any little mistake can turn a winning strategy into a losing one. And you will not necessarily notice this in the backtest. Continue reading “Build Better Strategies! Part 2: Model-Based Systems”