Learn How To Trade The Schaff Trend Cycle (STC) In Forex

Learn How To Trade The Schaff Trend Cycle (STC) In Forex

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Written by Peter Bosmans

The Schaff Trend Cycle (STC) indicator, invented by Dough Schaff measures overbought and oversold market conditions. It is an improved version of the traditional MACD indicator. It combines MACD + Slow Stochastics in an attempt to reduce the lag. The Schaff Trend Cycle indicator fluctuates between 0 and 100. Readings below 20 are considered oversold while readings above 80 are considered overbought.

GBP/USD Schaff Trend Cycle Hourly Chart

Type of technical indicator: Leading oscillator

Forex signals from the Schaff Trend Cycle (STC) oscillator

1. In trending markets

Oversold values (0 to 20): Look to buy dips in up trends when the signal line crosses up from below 20 to above 20.

Overbought values (80 to 100): Look to sell rallies in downtrends when the signal line crosses down from above 80 to below 80.

2. In range bound markets

Oversold values (0 to 20): Look for opportunities to buy near the low of the trading range when the signal line crosses up from below 20 to above 20.

Overbought values (80 to 100): Look for opportunities to sell near the high of the trading range when the signal line crosses down from above 80 to below 80.

Powerful trading combinations with the Schaff Trend Cycle (STC) oscillator indicator

Always use in conjunction with other analysis tools/indicators to make better trading decisions in the forex market.

Our preferences:

Candlestick patterns, trend lines and trend following indicators.

Suggested Further Reading

• Trend lines
• Candlestick patterns

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