Schaff Trend Cycle Indicator MT4 | MT5

The STC Indicator on MT4, developed by Doug Schaff, is classified as both a momentum indicator and an oscillator. It addresses the lagging nature of such indicators by incorporating cycle analysis to provide quicker and more accurate signals. Furthermore, by using this indicator on MetaTrader 5, it identifies overbought and oversold market conditions while filtering out noise for better clarity in trend direction.

Additionally, the STC is calculated using a modified version of the MACD formula, which applies a fast and slow EMA (Exponential Moving Average) and smooths them using a cycle-based stochastic calculation. The output is a line oscillating between 0 and 100, where key levels (25 and 75) indicate potential buy or sell opportunities.

• STC=EMA of %K
• %K= ([MACD Line−Lowest MACD] / [Highest MACD−Lowest MACD]) ​×100
• MACD Line= Fast EMA – Slow EMA 

To better understand how to use this indicator, here are two trading screenshoots from different scenarios: 

• In the EURCHF M30 chart example on metatrader 4, the STC indicator represents an uptrend cycle with a green line and a red line indicating the opposite trend cycle. In an oversold market condition, the indicator signals a long opportunity whenever it crosses above the 25 level. As the market direction shifts and enters an overbought condition, the STC will provide a sell signal, and the line will turn red.
• In the GBPCAD Daily chart example on metatrader 5, the STC indicator displays a downtrend cycle with a red line and a green line for the opposite trend cycle. In an overbought market condition, the indicator suggests a short opportunity whenever it crosses below the 75 level. As the market direction changes and enters an oversold condition, the STC will identify a buy opportunity, and the trend will reverse to an uptrend.