Hey there! I've been exploring the PocketOption broker trading platform, and they’ve upped their game with a cool new tool to enhance our trading in electronic contracts. Say hello to the Schaff Trend Cycle indicator – the “Swiss Army Knife of a Trader.” Pretty awesome, right?
The Schaff Trend Cycle (STC) is a charting tool I use to identify those sweet buy and sell signals in the forex market.
What’s great about the STC Indicator is that it combines the best features of two heavyweights: Stochastic and MACD. Unlike the MACD, which can be a bit slow to react, STC is quick on its feet, responding faster to market changes. Just be aware; it can stay in overbought or oversold zones longer than expected, which can be a downside.
This gem was developed by the well-known trader and FX strategy expert Doug Schaff. Legend has it he created it back in the late ’90s, but he didn’t release it to the public until 2008.
Now, this Schaff Trend Cycle indicator is right at my fingertips, thanks to Pocket Option. I can easily grab it from the standard indicators list and add it to my screen.
Description and settings of the indicator
So, here’s the lowdown: Stochastic tends to lag, while MACD sometimes takes on too much. Both struggle a bit when the market gets choppy during strong trends.
With the Schaff Trend Cycle Expert Advisor, Doug Schaff addressed those issues and added enhancements for cyclical movements. That’s why the STC indicator can provide accurate and timely signals, especially when the trends turn around.
The look of this indicator is pretty familiar – it features those 25 and 75 levels along with a signal line. You’ll see the Schaff Trend Cycle dancing in its own window below the price chart.
Experts are chatting about these settings:
- Cycle - 10;
- Slow line - 50;
- Fast line - 23;
If you’re just starting out in trading, I’d recommend sticking with those default settings.
How to trade options with the Schaff Trend Cycle?
I suggest using the STC along with the Stochastic principles.
- Go for a CALL option when the signal line breaks free from the oversold zone, crossing above 25.
- Go for a PUT option when the signal line drops below 75.
Another big bonus? This indicator works like a champ for any asset.
Pro tip: Set the expiration period for at least 3 bars.
The Schaff Trend Cycle indicator has made waves in the Forex scene, becoming the core of many traders’ strategies. Later on, some of us even took it to the stock market and electronic contracts because, let’s be real, it fits that scene perfectly.
