Schaff Trend Cycle

The Schaff Trend Cycle indicator devised by Doug Schaff in 2008, is based on the assumption that trends accelerate and slow down cyclically, so it reacts to abrupt price changes, while ignoring small changes. According to Doug Schaff’s conception of the indicator, following a certain period of time, the trend returns to the original point of development on the markets, and the cycle of its subsequent movements begins to repeat itself.

Operation:
A SELL signal is generated when the indicator line intersects down the 75% line;
a BUY signal is generated when the indicator line intersects the line by 25% upwards.
Doug Schaff also proposes a filtering of the signals: if the bar that follows the signal bar closes beyond the previous HIGH, this means a greater probability of the movement of prices and, consequently, of purchases. The signal for the sale is represented by the opposite situation, ie when the bar that follows the signal bar closes below the LOW of the previous bar.