Nonlag Schaff Trend Cycle Indicator

Nonlag Schaff Trend Cycle Indicator

Nonlag Schaff Trend Cycle indicator is an ideal tool for determining the trend direction and market reversal.

Developed by Doug Scaff, the Nonlag Schaff Trend Cycle indicator is calculated using MACD. As the name suggests, it uses a faster non-lagging Moving average, which makes the indicator react faster to the market changes. Besides the MACD, the indicator also uses a smoothed stochastic. This means it is a combination of two indicators. You can use the indicator to trade any currency pair in any timeframe.

How to Use the Nonlag Schaff Trend Cycle Indicator
The indicator ranges between 0 and 100. Like the MACD, the level should inform you whether to buy or sell.

Buy signal – Buy when the indicator rises past the 25 levels. The indicator color changes to green. In addition, you can filter bad signals by ensuring the candlestick after the trigger candle closes above the trigger bar.
Sell signal – sell when the indicator drops below the 75 levels. The indicator line changes to crimson. Similarly, candlestick behavior can help you filter out bad signals. The candle after the trigger bar should close above the trigger.

Trading Example

The picture shows the price action of the USD/CHF currency pair. The indicator gives a buy signal when it rises above the 25 level. Additionally, the indicator changes to green during an uptrend. You would have raked in profit if you opened a long position. Similarly, the indicator has crossed below75, which signifies a downtrend. Moreover, the indicator has changed to crimson, signaling the market is a downtrend. You, therefore, should enter a short position.

Conclusion
The indicator uses MACD and stochastics to determine the trend direction and show a reversal. You only have to ensure the indicator changes color and passes the 25 and 75 levels. The nonlag Scaff Trend cycle will suit you if you are a trend trader.