Schaff Trend Cycle

Description:

The Schaff Trend Cycle (STC) indicator is a technical analysis tool that combines elements of moving averages and the stochastic oscillator to identify market trends and potential reversals. It oscillates between 0 and 100, with levels above 70 indicating bullish momentum and levels below 30 indicating bearish momentum. Traders use it to assess both the direction and strength of a trend.

Input Parameters:

• Fast: A moving average that reacts quickly to recent price changes, commonly used for short-term trend analysis.
• Slow: A moving average that responds more slowly to price fluctuations, useful for identifying longer-term trends.
• Cycle: The length of the cycle used in calculating the indicator. Determines how sensitive the indicator is to changes in price movements.
• %D1 Length: Refers to the length of the %D1 line used in its calculation. The %D1 line is derived from the stochastic oscillator component of the STC indicator.
• %D2 Length: Refers to the length of the %D2 line used in its calculation. The %D2 line is derived from the stochastic oscillator component of the STC indicator.
• Upper: Presets to 75 which represents the upper boundary of the indicator.
• Lower: Presets to 25 which represents the lower boundary of the indicator.
• MA Type: Select the moving average type such as EMA, SMA, or HullMA.
• Price Source: The specific data points (such as open, high, low, or close) from each candle in a financial chart that an indicator uses for mathematical computations, enabling the calculation of metrics like the average over a specified period.

Use Cases:

• Trend Identification: Determine market direction by observing whether the STC line is above (bullish) or below (bearish) the 50 level.
• Signal Confirmation: Validate buy or sell signals from other indicators by ensuring alignment with the STC's indication of momentum.
• Overbought/Oversold Conditions: Identify potential reversals or corrections by noting extreme values of the STC line, indicating overbought (near 100) or oversold (near 0) market conditions.

This feature can be used in:

• Market Scanner
• Strategy Tester
• Multi-Factor Alerts
• Smart Checklist

Do you want to learn more? Check out our blogpost.