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Schaff Trend Cycle (STC)

What the Schaff Trend Cycle measures, how to read its 0 to 100 line, its settings on MillionChart and a worked example on gold.

The Schaff Trend Cycle (STC) is a faster, smoother reading of MACD: it runs the MACD line through a stochastic twice, so the result swings between 0 and 100 and turns early when a trend starts or ends. It is drawn in its own pane with levels at 25 and 75. Doug Schaff designed it to add cycle timing to a trend indicator.

STC (10, 23, 50, 0.5, Close) under gold, daily candles
STC (10, 23, 50, 0.5, Close) under gold, daily candles

What it shows#

  • STC — one line in its own pane on a fixed 0 to 100 scale. Near 100 the MACD line is at the top of its recent range, near 0 at the bottom. The line typically runs flat along 100 or 0 while a trend continues and crosses the levels when the cycle turns.
  • Upper and Lower — dashed levels at 75 and 25, with a light Zone fill between them.

How it is calculated#

First a MACD line: the exponential moving average of the Source over the Fast length (23) minus the one over the Slow length (50). Then a stochastic of that line over the Cycle length (10 bars) — where the MACD sits between its lowest and highest value of the window, from 0 to 100 — smoothed with the Smoothing factor (0.5: each bar moves half-way to the new value). The same pass is applied a second time, and the result is the STC. While the MACD window is flat the stochastic keeps its last value; with the defaults the line needs roughly 70 bars of history before its first value.

How traders use it#

  • STC rising through 25 is read as the start of an up cycle (the buy signal of Schaff's method); falling through 75 as the start of a down cycle.
  • A line pinned near 100 or 0 means the trend is still running; the signal comes when it leaves the extreme, not while it sits there.
  • Many traders take only the signals in the direction of a longer trend filter, such as a 200-bar moving average.
  • Watch out for: in a sideways market the line races between 0 and 100 and gives signals that go nowhere, and a sharp reversal shows up a few bars late.

Settings#

SettingDefaultWhat it changes
Cycle length10Bars of each stochastic window; shorter reacts faster
Fast length23The fast exponential average of the MACD line underneath
Slow length50The slow exponential average of the MACD line
Smoothing factor0.5How far each bar moves toward the new stochastic value (0.01 to 1); lower is smoother and slower
SourceCloseThe price the MACD is built on: Close, Open, High, Low, Mid, Typical or Average
Colours and style—The colour of the STC line, of the Upper level and Lower level and of the Zone fill between them

Example on gold#

Imagine gold has fallen for three weeks from $4,400 toward $4,250 and the STC has sat near 0 the whole time. Price steadies for a few days and the STC rises through 25. For example, a trader looking for the end of the correction could read that as the first sign of a new up cycle and look for an entry near $4,260 with a stop under the $4,240 low. The STC rolling back below 25 within a few bars, or price breaking the low, would mean the signal failed.

Add it to your chart#

  1. Click Indicators in the top strip (on the Pro screen you can press I).
  2. Type stc and click the indicator.
  3. Click its chip in the legend to open the Inspector and change the settings; drag the chip to reorder; the dot hides it; × removes it.