Schaff Trend Cycle – Екілік Options көрсеткіштері

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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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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).

Is This My Holy Grail EA :D

Ok. just want your feedback about my EA. i use 10point3 as my template and use stoch as a trigger fot BUY n SELL

Below is backtest report from month 1 to 12(12/8)

Ok for backtesting or demo please download the ea here

p/s: now u can change the value of OB(H_level) and OS(Low_level) for buy n sell signal for backtesting other pair

  • Post # 2
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  • Dec 9, 2007 11:22am Dec 9, 2007 11:22am
  • Post # 3
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  • Dec 9, 2007 11:24am Dec 9, 2007 11:24am
  • Post # 4
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  • Dec 9, 2007 11:26am Dec 9, 2007 11:26am

Capital : 10K
Broker : litefx

  • Post # 5
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  • Dec 9, 2007 11:46am Dec 9, 2007 11:46am
  • Post # 6
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  • Dec 9, 2007 11:50am Dec 9, 2007 11:50am

Looks interesting, but there really is not much to say.

A few points; What time frame? What stoch setting? Looks like it using a martingale, is that correct? Have you done any forward test. This is minute data with 50% accuracy.

Over all though, it looks very impressive. Congrats.

  • Post # 7
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  • Dec 9, 2007 11:53am Dec 9, 2007 11:53am

I do not know why, people like to use word «HOLY GRAIL» hehehe.. so i just use it , but is it 100%-200% a year is enough for us

Please backtest dan demo this ea and give the feedback .

I will live it nextweek in my 100usd micro account. so i will post the result here.

p/s: sorry broken english

  • Post # 8
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  • Dec 9, 2007 11:55am Dec 9, 2007 11:55am

Looks interesting, but there really is not much to say.

A few points; What time frame? What stoch setting? Looks like it using a martingale, is that correct? Have you done any forward test. This is minute data with 50% accuracy.

Over all though, it looks very impressive. Congrats.

oooo. i forget to put there

timeframe= H1 and use stoch 14, 3 ,3 and pair GU dan EU the best

yup it is martingale hehehe.

  • Post # 9
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  • Dec 9, 2007 12:03pm Dec 9, 2007 12:03pm
  • Post # 10
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  • Dec 9, 2007 12:09pm Dec 9, 2007 12:09pm

Here is the logic behind 10point3

  • Post # 11
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  • Dec 9, 2007 12:19pm Dec 9, 2007 12:19pm

Here is the logic behind 10point3

this ea using 10point3 as a template. then i just using Stoch 14, 3, 3 Overbought and OverSold as a buy n sell trigger. thats all

Please backtest and put the equity graph or detail statement here

  • Post # 12
  • Quote
  • Dec 9, 2007 3:21pm Dec 9, 2007 3:21pm

this ea using 10point3 as a template. then i just using Stoch 14, 3, 3 Overbought and OverSold as a buy n sell trigger. thats all

Please backtest and put the equity graph or detail statement here

It looks very impressive. Could you post the summary report for the backtest? I don’t have that much data to get to the report.

  • Post # 13
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  • Dec 9, 2007 3:48pm Dec 9, 2007 3:48pm
  • Post # 14
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  • Dec 9, 2007 7:29pm Dec 9, 2007 7:29pm

[quote=azam575;1750864]Ok. just want your feedback about my EA. i use 10point3 as my template and use stoch as a trigger fot BUY n SELL

Below is backtest report from month 1 to 12(12/8)

I dont want to discourage you but 50% modelling quality it is too low for a test to be reliable. 90% could mean something, at least encourage a try forward test and demo test, and if all OK live test with microlots.

Try increase mod quality and leave some data for forward test if you use optimalization which is only other name for curve fitting.

Hope this helps.

  • Post # 15
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  • Dec 9, 2007 7:33pm Dec 9, 2007 7:33pm

It looks very impressive. Could you post the summary report for the backtest? I don’t have that much data to get to the report.

  • Post # 16
  • Quote
  • Dec 9, 2007 7:36pm Dec 9, 2007 7:36pm

Ok. just want your feedback about my EA. i use 10point3 as my template and use stoch as a trigger fot BUY n SELL

Below is backtest report from month 1 to 12(12/8)

I dont want to discourage you but 50% modelling quality it is too low for a test to be reliable. 90% could mean something, at least encourage a try forward test and demo test, and if all OK live test with microlots.

Try increase mod quality and leave some data for forward test if you use optimalization which is only other name for curve fitting.

Hope this helps.

That why 1 post my ea here. i want all of you to backtest this ea using 90% or 99% modeling quality. can you help me backtesting it

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