Schaff Trend Cycle indicator is a cyclical oscillator. This indicator is based on the assumption that currency trends accelerate and slow down in a cyclical pattern. The Schaff Trend Cycle indicator was developed by Doug Schaff in 2008. This STC indicator is the product of the moving average convergence/divergence (MACD) which has a reputation as a trend indicator. But this MACD is also notorious for lagging due to its slow responsive signal line. The STC indicator is relevance as an early warning sign to detect currency trends which gives improved signal line.
Usage of the Schaff Trend Cycle Indicator :
If traders want to know more about and also use the Schaff Trend Cycle Indicator, then they can find it in the STUDIES section of Zerodha Kite and it can also find out to the Kite Mobile App. The Field is Close you can change this. The Period is 10 and you can change this value high and low. The Short Cycle is 23 and the Long Cycle is 50. You cha change Short and Long Cycle’s value high and low. Check the image below to understand how to attach the Schaff Trend Cycle indicator in HDFC Bank share price chart. You can attach this indicator on to any charts likes daily, weekly, monthly or intraday.
The Schaff Trend Cycle indicator is based on a trend indicator that is run through a cycle oscillator. It also creates an effective indicator ideal for entry and exit signals for trading. The developer of this indicator is Doug Schaff who built this indicator based on his over 20 years of experience in the forex markets. The STC was built to improve on the existing MACD to identify market trends.
The indicator for short gained popularity with traders due to its simplicity and high level of accuracy. It is learned that the STC is more accurate than the MACD and also helps in representing forthcoming price movements, quicker than the MACD. The strategy of this indicator is discussed in seeks to identify trends which occur in a cycle and the time frame for this strategy is the 15-minute time frame. The strategy of STC can be used on any currency pair.
How the Indicator Works :
The Indicator detects up and downtrends long before the MACD. This MACD indicator is also using the same exponential moving averages or EMAs, but it adds a cycle component to factor currency cycle trends. In currency cycle trends move based on a certain amount of days, this is factored into the equation of the STC Indicator to give more accuracy and reliability than the MACD. The moving average convergence/divergence (MACD) is nothing more than a series of exponential moving averages (EMAs) with a signal line and the indicator has improved on the MACD. MACD has a (12-period and 26-period) EMA with a nine-period signal line and it improved on this by incorporating MACD has a (23-period and 50-period) EMA with a cycle component used as the 10-period signal line. The traders can factor cycle trends based on X amount of days. In STC indicator the traders can know how far and how long a trend lasts in terms of potential pips to earn.
Ankita has done her Diploma Engineering in Computer Science & Technology. She is pursuing her degree in Engineering and also well experienced in the equity market and real estate related content writing. She is the one who has developed the technical indicators section of our site.