Schaff Trend Cycle Indicator Forex Strategy

The Schaff Trend Cycle indicator strategy is a forex trading strategy that is built to spot trends with an improved speed and accuracy.

The strategy is not choppy during trends and responds swiftly to changes. This is achieved via the combination of the Schaff-Trend-Cycle custom indicator and the EMA_Trend_Indicator.ex4.

Chart Setup

MetaTrader4 Indicators: EMA_Trend_Indicator.ex4 (default setting), Schaff-Trend-Cycle.ex4 (default setting)

Preferred Time Frame(s): Any

Recommended Trading Sessions: Any

Currency Pairs: USD/CHF, EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CAD, NZD/USD, EUR/CHF, GBP/JPY, EUR/JPY

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Enter a buy in the market if the following conditions or rules are true:

  1. If the DarkOrchid line of the Schaff-Trend-Cycle.ex4 custom indicator breaks above the 25.0000 level as shown on Fig. 1.0, it indicates that trend is changing in favor of the bulls, which means we should initiate a long position.
  2. If price opens and closes above the purple upper outer band of the EMA_Trend_Indicator.ex4 custom indicator, it is a trigger to go long on our pair of interest.

Stop Loss for Buy Entry: Place stop loss below the lower DarkOrchid rising line or below support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following indicator or chart patterns are on display:

  1. If the DarkOrchid line of the Schaff-Trend-Cycle.ex4 custom indicator dips and breaks below the 75.0000 level, it is a trigger to exit or take profit accordingly.
  2. If price swings lower and closes below the purple outer upper band of the EMA_Trend_Indicator.ex4 custom indicator, it is a sign to exit or take profit on any open position(s).

Sell Entry Rules

Initiate a sell position in the market if the following rules or conditions hold sway:

  1. If the DarkOrchid line of the Schaff-Trend-Cycle.ex4 custom indicator breaks below the 75.0000 level as depicted on Fig. 1.1, it indicates that trend is changing in favor of the bears, which translate into a bearish signal.
  2. If price opens and closes below the purple lower outer band of the EMA_Trend_Indicator.ex4 custom indicator, it is a trigger to go short on our pair of interest.

Stop Loss for Sell Entry: Place stop loss above the upper DarkOrchid declining line or above resistance.

Exit Strategy/Take Profit for Sell Entry:

Exit or take profit if the following indicator or chart patterns are on display:

  1. If the DarkOrchid line of the Schaff-Trend-Cycle.ex4 custom indicator surges and breaks above the 25.0000 level, it is a trigger to exit or take profit accordingly.
  2. If price pushes upwards and closes above the purple lower outer band of the EMA_Trend_Indicator.ex4 custom indicator, it is a signal to exit or take profit on any open position(s).

Fig. 1.1

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About The Trading Indicators

The Schaff-Trend-Cycle.ex4 custom indicator is an indicator that was designed by Dough Schaff, as a product of merging Slow Stochastics and the Moving Average Convergence/Divergence (MACD).

The Schaff-Trend-Cycle MT4 indicator is by that a trend indicator.

The EMA_Trend_Indicator.ex4 is a custom indicator that is designed the use of two EMA (Fast EMA 21 and Slow EMA 34) plotted on different periods.

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