Schaff Trend Cycle Indicator Guide
Schaff trend cycle indicator MT4 is a charting indicator that enables forex traders to forecast market trends. Therefore, traders can use the data provided by this indicator to determine ideal buy and sell signals. Moreover, the Schaff trend cycle indicator in MT5 is based on the assumption that the market trend rises or falls in a cyclical pattern. In this course, we will discuss the Schaff trend cycle indicator in Tradingview and MetaTrader platforms in order to understand how this forex tool works.
Schaff trend cycle indicator FAQ
What is Schaff trend Cycle ?
Schaff Trend Cycle (STC) indicator is a charting indicator commonly useful in identifying market trends and providing traders with buy and sell signals. It was developed by renowned foreign exchange trader Doug Schaff in 1999. STC indicator is an oscillator based on an assumption that states: that currency trends are accelerating and decelerating in cyclical patterns, anyhow of time frame.
How accurate is STC indicator ?
Some traders consider the STC indicator as an ameliorated edition of the MACD as the two technical tools use MAs. Yet, the advantage of the STC is in using cycles also. That is to say, the Schaff cycle MT4 indicator repeats patterns that can assist in catching trend directions.
So, the STC is a forward indicator that may give early trend signals before their occurrence. Because its improved signal line is regarded as a provider of early trend reversal signals. Consequently, this may enable traders to catch trend moves and enter/exit trades relatively faster and earlier. Nonetheless, the MT5 STC indicator has better be combined with other charting tools in order to have stronger signals.
How does this indicator work?
Many traders often use the Moving Average Convergence/Divergence (MACD) charting tool, which is an indicator that traders use to identify a boom in a stock’s price. This STC indicator is popular by the lags due to its slow signal lines. In contrast, the STC’s signal line can identify trends earlier. In fact, it frequently identifies uptrends and downtrends before the MACD indicator does this. While we calculate the STC using the same exponential moving average as the MACD. The STC adds a new period component to ameliorate accuracy and reliability. When we simply calculate the MACD using a series of moving averages. The period aspect of the STC is based on time (days for example). It is also applicable to intraday charts.
How do you trade with STC indicator ?
The Schaff Trend Cycle (STC) indicator is apparently a forex oscillator, indicating overbought and oversold market states. Overbought areas are marked above the 75 level of this STC indicator.
However Oversold areas are marked below the 25 level of the Schaff indicator. Hence, Fresh forex traders can profit from trading signals of the Schaff Trend Cycle tool as they are easy to understand.
STC long trade example
Let us consider this, four hours, AUD/CAD example. Traders may follow these two conditions to enter long trades:
- First, the Trend Cycle line decreases until it reaches an oversold region below the 25 level of the STC indicator for MT4.
- Second, this line reverses and rises beyond the broken 25 level, underlining a recent swing low.
The forex trader can open a buy order once those two steps are met.
STC short trade example
Considering the same currency pair with the same timeframe. Traders may follow these two steps to enter short orders:
- First, the Trend Cycle line increases until it reaches an overbought region above the 75 level of the MT4 STC indicator.
- Second, this line reverses and rises beyond the spoiled 75 level, highlighting a recent swing high.
The FX trader can initiate a sell trade when those two conditions are fulfilled.
Download Schaff trend cycle indicator for MT4
The Scaff Trend Cycle (STC) indicator for MT4 is an ultramodern Metatrader 4 indicator for interpretation that indicates a situation of an overbought or oversold. It represents a mixture of MACD and Stochastic to furnish oscillators with less lag and noise than MACD or Stochastics. Therefore, this indicator is very effective in detecting the emergence of new trends beforehand. It also helps forex traders stay in the direction of the trend.
- The STC curve crosses and passes above the 75 levels.
- This can indicate a start of a downtrend.
- The price dropped by 13.8375 bps.
In this case, the market is in an overbought condition.
Download Schaff trend cycle indicator for MT5
The MT5 Schaff Trend Cycle (STC) indicator is a modern Metatrader 5 indicator that indicates a situation of an overbought or oversold.
The STC Indicator is one of the best indicators to inform traders of forex market direction changes. This indicator uses two levels of 75 and 25. Consider the chart represented above, if the STC curve crosses the 25 levels, it usually indicates that the market is in an uptrend. However, when the STC breaks above the 75 levels, it usually indicates that the trend is getting strong in either direction highs or lows. Also, when the STC is straight above 75, it is a signal of an overbought. Conversely, when the line is below 25, it indicates that the stock is oversold.
Download Schaff trend cycle indicator for Tradingview
The Schaff trend cycle indicator Tradingview takes into account both time and moving averages, therefore it produces faster and more accurate signals than previous indicators (such as MACD). However, the STC indicator is a prospective indicator. Regarding the following Tradingview chart, we have an uptrend when the STC curve crosses the threshold of the 25 levels. And a downtrend when it crosses the threshold of 75 levels.
Conclusion
The Schaff Trend Cycle indicator is an efficient workaround for MACD on Metatrader. It eliminates the MACD offset while enhancing the profitability of forex traders. The combination of MACD and stochastics in a single enhances the effectiveness of the Schaff indicator. In addition, traders can download the indicator free of charge and install it with ease.