Schaff Trend Cycles - MetaTrader 5 Script - MQL5 #20281 - MT4/MT5 Resources

The Schaff Trend Cycle (STC) indicator is a combination of the Slow Stochastic and Moving Average Convergence/Divergence (MACD). MACD has a reputation as a trend indicator, but it's also notorious for lagging due to the slow response of its signal lines. The improved signal line makes STC an early warning signal for detecting currency trends.

STC can detect up and down trends long before MACD. It does this by using the same exponential moving average (EMA), but adds a cyclical component to account for currency cycle trends. Since currency cycle trends are based on a certain number of days, it is incorporated into the STC indicator's equation to provide greater accuracy and reliability than MACD.

Since MACD is nothing more than a series of EMAs with signal lines, STC is an improvement over MACD. MACD has 12- and 26-period EMAs, as well as a 9-period signal line. The STC indicator improves upon this by combining the 23-period and 50-period EMA with the periodic component used as a 10-period signal line. Since we can think of periodic trends in terms of X number of days, we can know how far and long the trend lasts in terms of points potentially earned.

Regardless of whether it is a new or old indicator, the concept of the STC indicator is quite original. Indicators have never been developed using cyclic components before. Most people use some form of moving average (especially EMA) as a basis because it is easier to calculate and it focuses on recent prices rather than a simple moving average of closing prices over a longer period of time.

Attachment download

📎 schaff_trend_cycle.mq5 (16.31 KB)

Source: MQL5 #20281