Schaff Trend Cycle Indicator

Related: Quantora Multi-Timeframe Trend Dashboard MT5 - Professional EMA Trend Analysis - another powerful indicator for MetaTrader 5 traders.

The Schaff Trend Cycle Indicator is a cyclical oscillator that provides stable and reliable trading signals by filtering out short-term market noise.

Also recommended: Quantora Multi-Timeframe MACD Dashboard MT5 - Professional Momentum and Trend Analysis - similar indicator with strong performance on MetaTrader 5.

It achieves this by calculating an overbought/oversold line based on market cycles, resulting in a smoother indicator that is less affected by minor fluctuations. The indicator generates alerts only for significant shifts in market conditions.

To enhance reliability and reduce false signals, the Schaff Trend Cycle Indicator combines two trend direction change calculation methods: the Smoothed Stochastic Oscillator and the MACD.

The indicator's operational field is displayed in standard units ranging from 0 to 100, utilizing two trigger levels: 25 and 75.

Key input parameters for the Schaff Trend Cycle Indicator include:

- mashort: Defaults to 23. This parameter sets the period for the fast moving average used in MACD calculation. It must not be lower than the malong parameter.

- malong: Defaults to 50. This parameter sets the period for the slow moving average used in MACD calculation. It must be greater than the mashort parameter for proper indicator operation.

- cycle: Defaults to 10. This parameter sets the length of a cycle in chart periods. The resulting cycle is twice as long due to the sequential calculation of two stochastics.

A basic trading strategy using the Schaff Trend Cycle Indicator involves selling when the indicator line falls below 80 and buying when it rises above 20. To further minimize false signals, traders should observe the following chart behavior:

For a buy signal, the bar following the trigger bar must close above the trigger bar's high.
For a sell signal, the bar following the trigger bar must close below the trigger bar's low.
The trigger bar is defined as the bar formed above the signal lines at levels 20 or 80.

This version of the Schaff Trend Cycle Indicator offers a selection of ten smoothing algorithms:

- Simple Moving Average
- Exponential Moving Average
- Smoothed Moving Average
- Linear Weighted Moving Average
- JMA Adaptive Average
- Ultralinear Smoothing
- Parabolic Smoothing
- Tillson's Multiple Exponential Smoothing
- Smoothing using Tushar Chande's algorithm
- Smoothing using Perry Kaufman's algorithm

It is important to note that the 'phase' parameter has varying meanings depending on the selected smoothing algorithm:

- For JMA, it is an external phase variable ranging from -100 to +100.
- For T3, it is a smoothing ratio multiplied by 100 for enhanced visualization.
- For VIDYA, it represents the CMO period.
- For AMA, it is the slow EMA period.
- For AMA, the fast EMA period is fixed at 2 by default, and the power ratio is also 2.

The indicator utilizes classes from the smoothalgorithms.mqh library, which must be copied to the \mql5\include folder within your terminal data directory. The usage of these classes is detailed in the associated article.

You may also like: Quantora Moving Average Dashboard MT5 - Professional EMA SMA Trend Analysis - excellent alternative for indicator users on MetaTrader 5.

/*
 * for the indicator to work, place the
 * smoothalgorithms.mqh
 * in the directory: metatrader\\mql5\include
 */
#property copyright "robotfx"
#property link "https://robotfx.org"
#property description "this code is educational. feel free to use, modify and upgrade as you wish. visit robotfx.org for professional trading tools"
#property description "this code is educational. feel free to use, modify and upgrade as you wish. visit robotfx.org for professional trading tools"
#property version   "2.00"

.......

• This tool is provided for educational and testing purposes only.
• Past performance does not guarantee future results.
• Trading involves substantial risk of loss. Use on a demo account first.
• Results may vary depending on market conditions, broker, and settings.
• We recommend thorough backtesting and forward testing before using with real funds.