Schaff Trend Cycle: A Powerful Momentum Indicator for Identifying Trends
By: Ivan Cavric Schaff Trend Cycle is a momentum indicator that is designed to identify trends in the market. It was developed by Doug Schaff and is based on the principle of combining two popular indicators - the Moving Average Convergence Divergence (MACD) and the stochastic oscillator. The Schaff Trend Cycle indicator is calculated using the following steps: Calculate the MACD by subtracting the 26-period exponential moving average (EMA) from the 12-period EMA. Calculate the signal line by taking a 9-period EMA of the MACD. Calculate the slow stochastic oscillator using the high, low, and closing prices over a specified period. Calculate the Schaff Trend Cycle by applying a 10-period EMA to the slow stochastic oscillator. The resulting indicator is a smoothed version of the slow stochastic oscillator that combines the power of the MACD and stochastic oscillator to identify trends in the market. One of the main advantages of the Schaff Trend Cycle indicator is its ability...