Schaff Strategy Trading System For MT4

Schaff Strategy Trading System For MT4

The Schaff Trading Strategy for MT4 is a profitable trend following strategy that can generate a decent outcome from an ongoing market trend. This strategy is mainly focused on market momentum. Moreover, we will be going to use multiple trading indicators like ici360 Schaff EMA, Super Signal, Semafor Point, Schaff Trend, Schaff MACD set-up to increase the trading possibilities.


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What Is the Schaff Trend Cycle?


The Schaff Trend Cycle (STC) is a type of MT4 indicator that has mainly been used to identify the market trends, and likewise, it provides buy and sell signals. The Schaff Trend Cycle (STC) was created by forex trader Doug Schaff in 1999. Regardless of the timeframe, currency trends speed-up and stoppage in a cyclical pattern is the presumption on which STC types of an oscillator are based.



How does Schaff Trend Cycle work?


Numerous traders are homely with the indicator called MACD (Moving Average Convergence and Divergence). MACD is an indicator that is used to foresee the price action. Yet due to the slow responsive signal line, it’s also infamous for lagging. On the contrary, Schaff Trend Cycle’s qualifies it to identify the ongoing trend shortly. However, it also detects fast the uptrend and downtrend before the MACD indicator does.



Key Notes


  • Schaff Trend Cycle (STC) indicator provides buy and sell levels in the forex market.

  • Schaff Trend Cycle (STC) works faster than the MACD indicator.

  • A disadvantage to STC is, it’s sustained in the overbought and oversold area for a long period.


Schaff Trading Strategy for MT4


As a trend following strategy, first, we have to identify the primary trend of the market in the higher timeframe to get highly accurate trades. However, the currency market is full of uncertainty. As a trader, we can predict the market by 70% to 80%. That’s the reason we have to develop a high accuracy trading method by using multiple indicators.

Let’s have a look at trading indicators for Schaff Trading Strategy for MT4:


  1. Schaff MACD

  2. Schaff Trend

  3. ICI360 Shaff EMA

  4. Super Signal

  5. Semafor Point


ICI360 Schaff EMA


ICI360 Schaff EMA is basically built by using EMA 5 and EMA 13. These two EMAs help to identify the market trend and provide buy and sell signals. If the EMA 5 crosses EMA 13 upside, it indicates a buy signal. On the other hand, if the EMA 5 crosses EMA 13 downside, it indicates a sell signal.



Super Signal


Super Signal mainly provides market reversal signals by showing arrows. Lime arrow indicates potential buy points of the market, and the yellow arrow indicates sell points of the market. This indicator provides a highly accurate trade signal by calculating market reversal points.



Semafor Point


The Semafor Point indicator is the most popular custom made indicator. This indicator is very reliable when you will understand how to use it. That is why we added this indicator in this forex trading system. Semafor Points mainly provide the market’s shorter and longer swing points in numbers and different colors.

Let’s have a look at the visual illustration of these indicators:





Bullish Trading Strategy


The Schaff Trading Strategy for MT4 is appropriate on all timeframes from 5 minutes to daily. However, the 1 hour and 4 hour gives high gains as they are squeezing out the short-term impacts of the economic events.

However, you can trade on any currency pairs you wish, such as GBPUSD, GBPCAD, GBPNZD, EURJPY, GBPJPY, USDJPY, EURUSD, EURCAD, EURNZD, etc.



Bullish Trading Conditions 


  1. Schaff Trend is Green

  2. MACD Cross upside, or

  3. EMA’s Cross upside




Entry


After confirming all the trading conditions, you should wait for the candle to close and execute the buy trade as soon as the candles close. Do not enter before closing the candle because it may impact your capital if the trade goes against you.



Stop loss


The stop loss should be below the previous swing low with 10 - 20 pips buffer in the H4 timeframe and 10 - 15 pips buffer on the H1 timeframe.



Take Profit


The ideal take profit level is based on a 1:1.5 or 1:2 risk: reward ratio. Therefore, if your stop-loss is 10 pips, you should set the take profit at 20 pips. Alternatively, you can take the profit when Schaff Trend becomes red.



Bearish Trading Strategy


The bearish trading system is also applicable to all timeframes from the 5 minutes to daily, where the 1 hour and 4 hours can provide high gains as they essence the short-term impacts of the economic events.

However, you can trade on any currency pairs you wish, such as GBPUSD, GBPCAD, GBPNZD, EURJPY, GBPJPY, USDJPY, EURUSD, EURCAD, EURNZD, etc.



Bearish Trading Conditions


  1. Schaff Trend is Red

  2. MACD Cross downside, or

  3. EMA’s Cross downside




Entry


After confirming all the trading conditions, you should wait for the candle to close and execute the sell trade as soon as the candles close. Do not enter before closing the candle because it may impact your capital if the trade goes against you.



Stop Loss


The stop loss should be above the previous swing high with a 10- 20 pips buffer in the H4 timeframe and 10 - 15 pips buffer on the H1 timeframe.



Take Profit


The ideal take profit level is based on a 1:1.5 or 1:2 risk: reward ratio. Therefore, if your stop-loss is 10 pips, you should set the take profit at 20 pips. Alternatively, you can take the profit when Schaff Trend becomes green.



Conclusion


The Schaff Trading Strategy for MT4 is the most profitable trading method because it depends on the high accuracy indicators like MACD, EMA, Schaff Trend indicator, etc. Therefore, you can gain decent trading results at the end of the month. However, in forex trading, there is no 100% guaranteed profit in each trade. Moreover, in every trading system, success depends on trade management. Therefore, to get a better outcome from this trading strategy, you should utilize the proper money management system and better psychological states. In addition, you can trail your stop loss level to break even when your trade is already in profit. Afterward, to take profit, you can target the next support or resistance level.


Download the complete system description and the files here:

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