Fisher Transformer Scans for ThinkOrSwim (3 Free Scans)

Overview

In this tutorial I build 3 Fisher Transformer scans for ThinkOrSwim on the free FW_FisherTransformer study that comes with the platform. The first finds the magenta arrow, the second stacks a second arrow with it, and the third adds trend, either with stacked 8, 21 and 34 period EMAs or with our Market Pulse.

I assume you already use the indicator on your charts. The video shows how its plots are named, how to reference one in a one-line scan, and how to get around the complex exception error ThinkOrSwim throws when you combine arrows in one filter. Every scan has a bullish and a bearish version.

Key Takeaways

What Is the Fisher Transform?

The Fisher Transform is a formula from John Ehlers that reshapes price data into a roughly normal (Gaussian) distribution, so turning points show up as sharp peaks and troughs. It scales price to a value x between -1 and +1, then calculates 0.5 times the natural log of (1 + x) divided by (1 - x).

ThinkOrSwim's FW_FisherTransformer study runs the Fisher transform equation on several stochastics to find changing points in trend. Its arrows make those turns easy to see. The magenta arrow carries the greatest weight, and the smaller arrows carry less.

The video assumes you already know the indicator. If you don't, add FW_FisherTransformer to a chart from the Studies menu and get comfortable with it before you build the scans.

The FW_FisherTransformer Plots and Their Names

The FW_FisherTransformer plots are what you reference in a scan, and their names tell you which arrow is which. Double-click the study on your chart to see all of them in its settings panel.

Each arrow plot name ends in u for the up arrows or d for the down arrows. The two numbers in the middle, with an x between them, are the two stochastic lengths behind that arrow.

The plot names on this page are spelled the way ThinkOrSwim's own study reference lists them. The scan code on this page is written out from the video, because the download has shared links instead of code.

To copy a plot name exactly, click the code icon on the study. The code is protected, but you can highlight a variable name there and copy it into your scan.

To clean up the chart, turn off Show plot for FTu, FTd and the FT line in the study settings, then click Save as default so you don't have to repeat it. With those hidden, the chart has less noise.

Scan 1: The Magenta Arrow

The magenta arrow scan is one line of thinkScript, and it teaches how every other Fisher Transformer scan works. To build it:

1. In the Scan tab, click Add filter and choose Study.
2. Scroll down the study dropdown, select Custom and open the thinkScript Editor tab.
3. Type the line below, click OK and run the scan.

This step’s code is free with an account. Create one or sign in.

The parentheses after FW_FisherTransformer tell ThinkOrSwim it's a built-in study, and the name after the period picks the plot. For the green arrow, swap in FS8x5u. For bearish arrows, change the final u to a d.

In the video, the scan returned 32 results in the S&P 500. Domino's Pizza (DPZ) was one of them, with a magenta arrow printing on the most recent bar.

Scan 2: Stacked Arrows

The stacked arrows scan looks for the magenta arrow together with a second arrow, which puts more weight on the signal. The magenta arrow is the constant, and the second arrow can be the green 8x5 or the yellow-white 5x3.

Putting both arrows in one filter with and throws a complex exception error: the scan needs smaller queries. The fix is a separate study filter for each arrow.

This step’s code is free with an account. Create one or sign in.

With the green arrow as a second filter, the list went from 32 to 11, and DPZ was still on it.

To accept either the green or the yellow-white arrow, add a condition group set to Any of the following. Put an FS8x5u filter and an FS5x3u filter inside it, and remove the standalone FS8x5u filter.

The scan then needs a magenta arrow plus a green or a yellow-white arrow. That's the workaround for the complex exception limit: one condition per filter, with condition groups doing the and/or logic.

Scan 3: Stacked Arrows With a Trend Filter

The third Fisher Transformer scan adds direction to the stacked arrows. The trend filter goes under All of the following, so it has to be true along with the arrows. I show two ways to define trend.

Option 1: Stacked EMAs

This step’s code is free with an account. Create one or sign in.

The EMAs are stacked when the 8 is above the 21 and the 21 is above the 34. Adding this filter took the list from 11 to 5. For more on stacked averages, see our stacked moving averages scan.

Option 2: Market Pulse

The Market Pulse version is the one I prefer for trend. You need the code of our free Market Pulse indicator, from the top down to the AddLabel line.

1. In the trend filter, comment out the EMA code and paste in the Market Pulse code.
2. Change the VMA plot, the Market Pulse line, to a def.
3. Make bullish the plot, and add the condition that the close is at or above the VMA. That's the same test the Market Pulse label uses for its acceleration stage.
4. Comment out the AddLabel line and run the scan.

This version returned 4 results. Philip Morris (PM) showed stacked arrows and a green Market Pulse line, the 2 conditions the scan looks for. The download's third scan uses the EMA version.

Arrows Below the -1.2 Line

The Fisher Transformer arrows can also be filtered by where they print. To find stacked arrows below the -1.2 line, add a less-than-or-equal-to -1.2 test to each arrow filter:

This step’s code is free with an account. Create one or sign in.

Add the same test to the second-arrow filters. In the video this returned 7 results, including Domino's and Kraft Heinz, both with stacked arrows below the -1.2 line. The video doesn't show whether the trend filter was still on for this run.

Bullish and Bearish Versions

Every Fisher Transformer scan flips to bearish by reversing it. The table shows what changes.

The video shows the first 2 changes and says to reverse the whole idea for bearish scans. It doesn't show a bearish EMA filter: the order in the table mirrors the bullish filter, and the bearish shared scans in the download have the original filters.

What the Scans Found in the Video

The Fisher Transformer scans narrowed one list step by step in the video. The first run used the S&P 500, and each later step changed the filters on that same scan.

These results come from the day I recorded, so your lists will be different.

How I Use the Fisher Transformer Scans

The Fisher Transformer scans build a short list of charts to look at. A magenta arrow marks a possible change in trend, a second arrow adds weight to it, and the trend filter adds direction. I open the results on a chart to confirm the arrows and the trend, the way I did with DPZ and PM in the video.

A scan hit is a starting point for a trade idea. Decide where your stop goes before you enter, and size the position so a stop-out costs a small, fixed share of your account.

To look at these signals over history, see our tutorial on how to backtest weekly Fisher Transformer signals. More free scans are on our scans page.

How to Import the 6 Ready-Made Scans

The Fisher Transformer download is a .txt file with 6 ThinkOrSwim shared links: 3 bullish scans and 3 bearish scans.

1. Magenta Arrow Only
2. Magenta Arrow + Stacked Secondary Arrow
3. Stacked Arrows + Stacked EMAs

To load one, click Setup in the top right corner of ThinkOrSwim, choose Open shared item, paste in the link and save the scan. If you haven't imported anything before, start with our guide on how to import into ThinkOrSwim. The Code tab on this page has the bullish filters written out from the video.

Download

Questions

Related tools

Backtest Weekly Fisher Transformer Signals in 10 MinutesthinkScript tutorial · FreeIncreasing VolumeScan · FreeMACD Crossover Near Zero LineScan · FreeAnchored VWAP ScansScan · FreeUpcoming Earnings with High Short InterestScan · FreeHigh Short Interest Near 52 Week HighsScan · Free