Schaff Trend Cycle (STC) - t0rdn3

Schaff Trend Cycle (STC)
By t0rdn3 (original STC by [SHK], now with more descriptive naming)

Description
The Schaff Trend Cycle (STC) is a momentum-based oscillator that combines the speed of a fast EMA crossover with cyclical normalization. Developed by Doug Schaff, it identifies market turning points more responsively than MACD or RSI.

How It Works
1. EMA Difference: Calculates the difference between two EMAs of the source series (default: close).
2. Cycle Percentage: Normalizes that difference to a 0–100 range over the cycle period.
3. Smoothing: Applies exponential smoothing twice—first to the cycle percentage, then to its normalized cycles—to reduce noise.
4. Final STC Line: Produces a smoothed oscillator oscillating between 0 and 100.

Alerts
- "STC turned down above 75": Fires once when STC makes a local peak above the upper threshold (75).
- "STC turned up below 25": Fires once when STC makes a local trough below the lower threshold (25).

Inputs

• Cycle Period: 12 — Lookback in bars for normalization
  
• Fast EMA Length: 26 — Period of the fast EMA
  
• Slow EMA Length: 50 — Period of the slow EMA
  
• Smoothing Factor: 0.5 — Exponential smoothing coefficient (0–1)
  

Usage
Readings above 75 indicate an overbought cycle; readings below 25 indicate an oversold cycle. Crossings of the 50 midline can confirm trend direction:
- STC rising through 50 → bullish shift
- STC falling through 50 → bearish shift

Combine STC with price action or other trend filters to improve signal quality. You can adjust the cycle period and EMA lengths to match different timeframes or instruments.