Schaff Trend Cycle and Moving Average Filters for Directional Entries

Summary

This strategy combines the Schaff Trend Cycle (STC) with two moving averages to define directional entries. A long signal occurs when STC crosses above 25, the faster average is above the slower one, and price is above the faster average. A short signal uses an STC cross below 75, the faster average below the slower one, and price below that average. The document describes defaults of 35 and 200 periods for the averages and a 400-point profit and loss exit range.

The rationale is to use STC for momentum or cycle direction and moving averages for trend context and price confirmation. The source code uses exponential averages despite the prose describing simple moving averages, and the backtest configuration specifies BTC/USDT futures. No backtest results are reported. The stated risks include false STC breakouts, whipsaws from average-based filters, and spread or slippage concerns; the suggested filters and parameter changes are not tested in the document.

Key ideas

• A long entry requires STC to cross above 25 with price and the faster average aligned above the slower average.
• A short entry requires STC to cross below 75 with price and the faster average aligned below the slower average.
• The prose names simple averages, while the source calculates exponential averages.
• The published setup includes a 400-point profit and loss exit range.
• The document gives no performance results and notes false signals and trading costs as risks.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.