Schaff Trend Cycle: Construction, Threshold Signals, and Price Confirmation

Summary

The Schaff Trend Cycle is described as a 0-to-100 oscillator built by applying stochastic calculations twice to a MACD series. It aims to combine MACD trend information with a smoothed stochastic measure, based on the premise that currency trends accelerate and decelerate cyclically. The indicator uses configurable fast and slow moving-average periods and a cycle length; the source lists defaults of 23, 50, and 10 respectively. Levels 25 and 75 serve as signal thresholds.

A basic rule buys when the oscillator rises above 25 and sells when it falls below 75. A suggested confirmation requires the next bar to close beyond the trigger bar’s high for a buy or below its low for a sell. Alerts and chart arrows are optional features. The document explains the construction and rules but gives no test results, market-specific evaluation, or risk controls, so it does not establish profitability or robustness.

Key ideas

• The oscillator applies stochastic calculations twice to a MACD line and ranges from 0 to 100.
• The described thresholds are 25 for bullish signals and 75 for bearish signals.
• A next-bar close beyond the trigger bar’s high or low is offered as price confirmation.
• The document supplies no performance evidence or risk-management rules.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.