Schaff Trend dövrü – Binary Options göstəriciləri

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Schaff Trend Cycle — Indicator Tutorial

Schaff Trend Cycle (STC) is an oscillator-type indicator that can help you identify positive and negative trends, pinpoint entry and exit points, as well as provide buy and sell signals. What’s so special about it and why you might want to use it in trading? First, it is easy to understand. Schaff Trend Cycle is basically your most typical oscillator spiced up with a cycle component. Secondly, it was developed as a “better and more accurate version” of MACD (according to its author). Read the full article to understand how to trade with Schaff Trend Cycle and add it to the collection of your trading strategies.

Schaff Trend Cycle on the IQ Option platform

How does it work?

As already mentioned, Schaff Trend Cycle works in a similar fashion to MACD. It also incorporates the notion of cycles, crucial to the global financial markets, to make it easier to spot positive and negative tendencies.

Here is how to understand the readings of this indicator. There are two thresholds: one at 25 and the other at 75. When the indicator crosses above the 25 line, an uptrend is observed. When the indicator crosses below the 75 line, a downtrend is believed to be present. When the indicator is between the 25 and the 75 lines, the trend is developing in one of the two directions.

When the indicator turns into a straight line (which only happens in its uppermost and lowermost points), the asset is either overbought — when above the 75 line, or oversold — when below the 25 line. In both cases, a trend reversal can be expected, but no exact timeline is provided.

How to apply in trading?

STC is a pretty straightforward indicator, as there are not so many ways in which it can be used. And remember, though originally designed for Forex trading, it can be effectively applied to all asset types and all time frames. Here’s how traders usually use Schaff Trend Cycle.

When the indicator goes above the 25 line, the trend is believed to be taking a positive turn (according to the indicator). It is when traders consider opening a buy position, but only if the confirmation is received. What is a confirmation? A candle after the current one that moves in the same direction can be considered a confirmation. Readings of other indicators that go in line with STC can be treated as a confirmation, as well. The same rules apply to negative trends. When the indicator goes below the 75, some traders consider opening a sell position. However, it is always necessary to doublecheck the readings of any indicator you use, including STC.

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Positive and negative trends identified by STC

Now, what is the optimal time to close the deal? Some say it is when the indicator turns to the straight line, as it means that the trend has run out of its power and a new trend is required to open another deal.

How to set up?

When working with IQ Option, setting up the Schaff Trend Cycle indicator is easy. Here’s what you need to do:

1. Click on the ‘Indicators’ button in the left-hand bottom corner of the screen and go to the ‘Momentum’ tab,

2. Choose ‘Schaff Trend Cycle’ from the list of available indicators,

3. Without changing the default setting click the ‘Apply’ button. Experienced traders can adjust settings to their liking, but this option is not recommended for novice traders.

The indicator is ready to use!

Final thoughts

Schaff Trend Cycle is an amazing oscillator to learn and add to your portfolio of useful indicators. The only thing to remember is that STC, as any other technical analysis tool, is not capable of providing accurate signals 100% of the time. Therefore, it will return false signals from time to time.

STC is a leading indicator, which means that it sends a signal before the price move has occurred. It also means that it lacks the accuracy of lagging indicators and should be used in conjunction with other technical analysis tools.

NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
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47# Schaff Trend Cycle strategy

Cycle Trading

Submit by Forexstrategiesresources

Time Frame’s: 15 min and above

Indicators:

Schaff Trend Cycle

Stocastich (21, 9,9)

Rules to enter a long trade

1) The 100 exponential moving average is sloping up.
2) Wait for the Schaff Trend Cycle to reach oversold territory on the chart (-10 +10).,
go long when the Schaff Trend Cycle turns back above 10, and Stocastich crosses line up.
3) Place stop 10 pips below the most recent level of support.
4) Take profit: Close the trade if the Schaff Trend Cycle indicator goes below 90.

Rules to enter a short trade

1) The 100 exponential moving average is sloping down.
2 Wait for the Schaff Trend Cycle to reach overbought territory on the chart (90-110),
go short when the Schaff Trend Cycle turns back below 90, and Stocastich crosses line down.
4) Place stop 3 pips above the most recent level of resistance.
5) Take profit: Close the trade if the Schaff Trend Cycle indicator moves down to -10 and then rises back above +10

Schaff Trend: A Faster And More Accurate Indicator

What Is Schaff Trend Cycle?

The Schaff Trend Cycle (STC) is a charting indicator that is commonly used to identify market trends and provide buy and sell signals to traders. Developed in 1999 by noted currency trader Doug Schaff, STC is a type of oscillator and is based on the assumption that, regardless of time frame, currency trends accelerate and decelerate in cyclical patterns.   

How STC Works

Many traders are familiar with moving average convergence/divergence (MACD) charting tool, which is an indicator that is used to forecast price action and is notorious for lagging due to its slow responsive signal line . By contrast, STC’s signal line enables it to detect trends sooner. In fact, it typically identifies up and downtrends long before MACD indicator.

Key Takeaways

  • Schaff Trend Cycle is a charting indicator used to help spot buy and sell points in the forex market.
  • Compared to the popular MACD indicator, STC will react faster to changing market conditions.
  • A drawback to STC is that it can stay in overbought or oversold territory for long stretches of time.

While STC is computed using the same exponential moving averages as MACD, it adds a novel cycle component to improve accuracy and reliability. While MACD is simply computed using a series of moving average, the cycle aspect of STC is based on time (e.g. number of days).

It should also be noted that, although STC was developed primarily for fast currency markets, it may be effectively employed across all markets, just like MACD. It can be applied to intraday charts, such as five minutes or one hour charts, as well as daily, weekly, or monthly time frames.

STC Isn’t Perfect

While the STC indicator seems to boast higher reliability than MACD, it has some inherent flaws. Namely, it can linger in overbought and oversold territory for extended periods of time. For this reason, the indicator is most often used for its intended purpose of following the signal line up and down, and taking profits when the signal line hits the top or bottom. Let’s see how it works.

Consider the following hourly chart of the of the British pound and Japanese yen currency pair, GBP/JPY. While MACD generates its signal when the MACD line crosses with the signal line, the STC indicator generates its buy signal when the signal line turns up from 25 (to indicate a bullish reversal is happening and signaling that it is time to go long), or turns down from 75 (to indicate a downside reversal is unfolding and so it’s time for a short sale).

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