Volume-Adjusted Schaff Trend Cycle (VASTC)

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Volume-Adjusted Schaff Trend Cycle (VASTC)

The VASTC is a fairly fast-moving oscillator designed to identify trends early and signal when trends may be nearing their end. While it can be used for both trend-following and mean-reversion strategies, it shines in trend-following setups. It’s particularly useful for catching the start of a trend and giving early warnings that a trend might end soon, making it a valuable addition to a multi-indicator system.

How It Works:
The VASTC adapts the traditional Schaff Trend Cycle by adjusting the MACD component with volume data. This volume-adjusted MACD is run through two stochastic processes, applying exponential smoothing to enhance responsiveness. Volume sensitivity allows the VASTC to adapt dynamically to periods of high or low trading activity, providing more reliable trend signals.

Recommended Use:
Use VASTC in confluence with other indicators to confirm trend entries and exits. It’s best for identifying early trend setups rather than sustaining prolonged trend trades. When used alongside other indicators, especially those with a longer-term outlook or momentum based trend indicators, you’ll gain a clearer signal for potential exits or entries. Always backtest the VASTC on your chosen assets to determine the most effective input parameters, as the defaults may not suit all markets or assets. Different assets behave differently, and adjustments in parameters can improve its ability to analyze the assets you're looking at.

Parameters:

• Length: Sets the primary smoothing length.
  
• Fast/Slow Length: Adjust the speed of the volume-adjusted MACD component.
  
• Factor: Controls the final smoothing applied to the STC.
  
• Overbought/Oversold Levels: Defines overbought/oversold levels.
  

Experiment with these settings to customize the VASTC to your trading strategy and asset.

Disclaimer: This indicator is a tool to complement your trading analysis and should not be used in isolation. Always backtest and use other confluence signals for best results. The assets I looked at when making this indicator are almost certainly different than what you're looking at.