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Schaff Trend Cycle Indicator

As traditional financial markets continue to integrate with digital technologies, the range of available instruments for digital contracts is expected to expand even further. This trend presents new opportunities for investors and traders to diversify their portfolios and capitalize on emerging markets. The digital contracts market is seeing an influx of instruments from various financial exchanges, enabling the creation of novel trading systems and providing a reliable means of generating profits through options trading.

The IQ Option broker offers the use of the Schaff Trend Cycle (STC) advisor within its terminal, which is an indicator that gained recognition in 2008 and is less favored by “old school” traders. However, this tool should not be overlooked as it combines the strengths of two popular Expert Advisors and was created by a highly skilled individual in the field – Doug Schaff. Mr. Schaff’s company, FX-Strategy, specializes in developing profitable strategies and automated systems for financial market trading, further emphasizing the credibility of the STC advisor.

Who created Schaff Trend Cycle (STC)?

Doug Schaff is a well-known figure in the financial trading industry. He has been active in the financial markets for over 20 years. He created of the Schaff Trend Cycle (STC) indicator to analyze market trends and identify potential trading opportunities. He is also the founder and owner of FX-Strategy, a company that specializes in developing trading systems and strategies for financial markets.

The Schaff Trend Cycle (STC) indicator is a tool that incorporates the benefits of Stochastic and MACD while minimizing their drawbacks. Specifically, MACD provides clear signals but lags behind the market, whereas Stochastic works ahead of the curve but lacks precision.

To create an almost perfect tool, the creator of STC combined the formulas of both indicators. The Schaff indicator first calculates the difference between fast and slow moving averages using the MACD formula, and then smooths the result using Stochastic’s algorithm.

Within the EA settings, you will find the fast and slow lines, cycle length, and the number of bars as indicators. The recommended settings for the oscillator are 23, 50, 10 and 300. When you complete the tool settings, a window with a moving average and levels 25 and 75 will appear on the screen.

How to trade with STC?

One of the benefits of the Schaff Trend Cycle indicator is its versatility, as it can be applied to any asset and during any of the four trading sessions. However, a drawback of this tool is that it is best used on higher timeframes, which may not be optimal for the binary options market.

In terms of its trading approach, the Schaff indicator operates similarly to other comparable tools.

Purchase a call option when the indicator exits the oversold zone.

Purchase a put option when the indicator exits the overbought zone.

In this scenario, the relevant levels are 25 and 75. It is recommended to set the expiration period to at least two bars in duration.

In conclusion, the Schaff Trend Cycle indicator is a versatile tool that can be used across a range of financial assets and trading sessions. By combining the strengths of Stochastic and MACD while minimizing their limitations, it provides reliable signals to traders. While it is recommended to use this indicator on higher timeframes, it remains a valuable asset for traders seeking to achieve consistent profits. Despite being a newer tool, it has already demonstrated its efficacy, and traders may wish to consider incorporating it into their trading strategies.

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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