Little-known oscillators: Coppock, Schaff, RSI-2 and TSI
Beyond the RSI, MACD and stochastic, there's a handful of momentum oscillators almost nobody uses but that carry useful ideas. Here we gather four: the Coppock (for long-term bottoms), the Schaff Trend Cycle (a faster, lower-lag cycle), the Connors RSI-2 (for mean reversion) and the True Strength Index (heavily smoothed momentum). None is magic, but each solves something concrete.
By the TradingCalculator.Pro team · Updated on · About us
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Why other oscillators
All oscillators try the same thing: measure the speed and strength of price to spot exhaustion or thrust. The classics (RSI, MACD) have known flaws — lag, false signals in a trend — and these four were born to tackle specific problems: one for big bottoms, one to cut the lag, one to buy dips, one to smooth the noise. Seeing them widens your toolbox.
The Coppock Curve
Created by Edwin Coppock in 1962 to spot long-term market BOTTOMS (meant for indices on the monthly chart). It sums two rates of change (~11 and ~14 months) and smooths them. The classic signal: when the curve is below zero and TURNS up, it marks a major bottom and a long-term buy zone. It's no good for fine timing or selling; it's a long-cycle compass.
The Schaff Trend Cycle (STC)
Doug Schaff combined the MACD with the cyclical logic of the stochastic to create an oscillator that reacts EARLIER than the normal MACD. The STC oscillates between 0 and 100 and tries to catch cycle turns with less lag, marking overbought (~75) and oversold (~25). It's faster and cleaner than the MACD, though in exchange it gives more false signals in rangebound markets.
The Connors RSI-2
Larry Connors popularised using a 2-period RSI (instead of 14) for mean reversion in stocks and indices: enter when a very low RSI-2 (e.g. <5) marks extreme oversold WITHIN a background uptrend (above the 200 average). It's hyper-jumpy — it hits the extremes constantly — so it only works with a clear trend filter and strict exit rules.
The True Strength Index (TSI)
The TSI, by William Blau, is a DOUBLE-smoothed momentum oscillator: it applies two exponential averages to the price change to filter noise and leave a clean line crossing a zero line and a signal. Its advantage is fewer false signals than raw momentum, and its divergences are fairly reliable; its cost is some lag from the double smoothing.
Limits (honesty)
None of these oscillators is a money printer: they all derive from past price, so they run behind, and in strong trends any oscillator saturates and misleads. Don't stack them all — you'll end up with contradictory signals; pick one that fits your style (Coppock for position longs, RSI-2 for reversion, etc.), test it on data and use it with confluence and risk management.
How you validate one of these
A little-known oscillator has one advantage and one danger, and they are the same: almost nobody has tested it. Three things before trading it. First, check parameter sensitivity: if it works at 14 periods and collapses at 13 and 15, what you found is fitted noise. Second, split it into in-sample and out-of-sample, and do not touch the out-of-sample stretch until the end. Third, count how many variants you tried: if you looked at forty combinations, the best one looking good is exactly what you would expect even if none of them works. Without those three, what you have is a pretty curve. Two more things worth remembering: transaction costs eat short-cycle oscillators first, so test with realistic spreads, and several of these indicators were designed decades ago on instruments and volatility regimes that no longer resemble the one you are trading.
