The RSI + Schaff Trend Cycle (STC) Strategy for Spotting Forex Market Trends

Last Updated on March 9, 2025 by Arif Chowdhury

Are you tired of the endless struggle with Forex trading?

Do you feel like you’re constantly second-guessing your decisions?

You’re not alone.

Many traders grapple with the same issues.

But here’s a thought: what if I told you there’s a powerful strategy that simplifies your approach?

Let’s dive into the RSI + Schaff Trend Cycle (STC) strategy.

What is the RSI + STC Strategy?

First off, let’s break it down.

RSI (Relative Strength Index) measures the speed and change of price movements.

It ranges from 0 to 100, helping you identify overbought or oversold conditions.

STC (Schaff Trend Cycle), on the other hand, is a momentum indicator that combines the concepts of MACD and cycles.

Together, they create a dynamic duo that can help you spot trends effectively.

Identify Market Conditions
With the RSI, you can easily see if a currency pair is overbought (above 70) or oversold (below 30).
This insight is crucial for timing your entries and exits.
Capture Trend Reversals
The STC helps you gauge the strength of a trend.
When the STC crosses above 25, it signals potential bullish momentum, while crossing below 75 indicates bearish trends.
Statistical Edge
Studies show that combining multiple indicators can improve your win rate.
In fact, strategies using RSI and STC have reported win rates of over 60% in trending markets.

Now that you know the basics, let’s get into practical steps.

Set Up Your Chart
- Use H4 (4-hour) charts for a more reliable analysis.
- Apply the RSI and STC indicators to your chart.
Look for Overbought/Oversold Levels
- Watch for the RSI to hit extreme levels (above 70 or below 30).
- This is your cue to consider potential reversals.
Confirm with STC
- If the STC aligns with the RSI signals, you’ve got a solid setup.
- For instance, if RSI is above 70 and STC is trending down, it’s a strong sell signal.
Manage Your Risk
- Always set stop-loss orders to protect your capital.
- A good rule of thumb is to risk no more than 1-2% of your account on a single trade.

As a seasoned Forex trader since 2015, I’ve explored various strategies and honed my skills.

The RSI + STC strategy is part of my arsenal, and I’ve integrated it into my 16 trading bots.

These bots are designed to trade major currency pairs like EUR/USD, GBP/USD, USD/CHF, and USD/JPY.

What’s unique?

Each currency pair has 3-4 bots tailored to maximize returns while minimizing risks.

This multi-layered diversification means:

You’re less likely to experience correlated losses.
The bots trade on H4 charts, targeting long-term gains of 200-350 pips.
They’ve been backtested for 20 years, proving their resilience in various market conditions.

And the best part?

I’m offering this entire EA portfolio for FREE!

If you’re ready to elevate your trading game, check out my trading bots here.

Stay Informed
Keep an eye on economic news that could impact the Forex market.
Major events can lead to volatility and affect your trades.
Adjust Your Settings
Customize the RSI and STC settings based on your trading style.
Some traders prefer a shorter period for quicker signals, while others opt for longer periods for more stability.
Practice Makes Perfect
Use a demo account to practice the strategy without risking real money.
This will help you gain confidence and refine your approach.

To support your journey with the RSI + STC strategy, you need a reliable broker.

I’ve tested several, and you can find the best Forex brokers here.

Choosing the right broker can enhance your trading experience and support your success.

Remember, trading isn’t just about strategies; it’s about consistent execution and risk management.

With the right tools and mindset, you can navigate the Forex market with confidence.