Inverse Fisher Cyber Cycle
The Inverse Fisher Cyber Cycle (ICYCLE) was authored by John Ehlers. The ICYCLE incorporates the current price, three previous prices, a user defined alpha factor, Euler’s number and feedback to arrive at its value. The user may change the input (midpoint) and alpha. This indicator’s definition is further expressed in the condensed code given in the calculation below.
How To Trade Using The Inverse Fisher Cyber Cycle
Adjust the top and bottom guides to control the quantity and quality of the trading signals. If the ICYCLE peaks above the top guide a sell signal will be generated. Conversely, if the ICYCLE troughs below the bottom guide a buy signal will be given. The 0 line divides the bulls above from the bears below.
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//input = price, user defined, default is midpoint
//alpha = user defined, default is .07
//exp = function, returns Euler’s number (e) raised to power of its argument
//prev = previous, index = current bar number
prevP1 = price[index-1]; prevP2 = price[index-2]; prevP3 = price[index-3]; smth = (price + 2*prevP1 + 2*prevP2 + prevP3) / 6; default = (price - 2*prevP1 + prevP2) / 4; prevS1 = smth[index-1]; prevS2 = snth[index-2]; prevC1 = ifNull(default, cycle[index-1]); prevC2 = ifNull(default, cycle[index-2]);; Plot1: cycle = (1 - .5*alpha)*(1 - .5*alpha) * (smth - 2*prevS1 + prevS2)+2*(1 - alpha)*prevC1 - (1- alpha)*(1-alpha)*prevC2; Plot2: icycle = 100 * (Math.exp(2*cycle) -1) / (Math.exp(2*cycle) + 1); //Signals prevI = icycle[index-1]; highSell = icycle for last sell signal, reset to max_negative at each buy signal; lowBuy = icycle for last buy signal, reset to max_positive at each sell signal; sell = (icycle moreThan topGuide) AND (prevI moreThan icycle) AND (icycle moreThan highSell); buy = (icycle lessThan bottGuide) AND (prevI lessThan icycle) AND (icycle lessThan lowBuy);