The Schaff Trend Cycle (STC) Metatrader 5 Forex indicator is commonly used to spot or confirm turning points in the market as well as price direction.
Doug Schaff is the man behind the schaff_trend_cycle Metatrader 5 forex indicator and the technical tool is built around the assumption that currency trends accelerate and decelerate in a cyclical pattern that can reveal the dominant price cycle of any currency within any specified timeframe.
The Schaff Trend Cycle was created by Doug after he tried to resolve the inconsistencies that he noticed between two broadly used methods of determining trend:
Moving Average Convergence and Divergence (MACD), the movement of two moving average towards and away from each other.
Price Cycles, the direction of the prevalent price cycle as seen on various smoothed Stochastics.
The Schaff Trend Cycle is a mishmash of running a MACD line (the difference between two exponential moving averages) through a double Smoothed Stochastic algorithm.
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Example Chart
The GBP/USD H1 chart below displays the Schaff Trend Cycle forex indicator in action
Basic Trading Signals
Buy Signal: Go long when the line of the schaff_trend_cycle Metatrader 5 forex indicator breaks above the 20.00 level.
Sell Signal: Go short when the line of the schaff_trend_cycle Metatrader 5 forex indicator breaks below the 80.00 level.
Exit buy trade: Close all buy orders if while a bullish trend is ongoing, the line of the schaff_trend_cycle MT5 fx indicator breaks below the 80.00 level.
Exit sell trade: Close all sell orders if while a bearish trend is ongoing, the line of the schaff_trend_cycle MT5 fx indicator surges above the 20.00 level.
Tips: The schaff trend cycle MT5 indicator pools the benefits momentum and trend indicators.
The region below the 20 (misty rose area) and above the 80 levels (light blue area) are the oversold and overbought regions respectively.
