Индикатор STARC Bands

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Stoller Average Range Channel Bands — STARC Bands Definition and Uses

What are STARC Bands?

Commonly called STARC Bands, Stoller Average Range Channel Bands developed by Manning Stoller, are two bands that are applied above and below a simple moving average (SMA) of an asset’s price. The upper band is created by adding the value of the average true range (ATR), or a multiple of it. The lower band is created by subtracting the value of the ATR from the SMA.

The channel created by the bands can provide traders with ideas on when to buy or sell. During an overall uptrend, buying near the lower band and selling near the top band is favorable, for example. STARC bands can provide insight for both ranging and trending markets.

Key Takeaways

  • During a rising trend, when prices are making overall higher highs and higher lows, it may be favorable to buy near the lower band (STARC Band-) and sell near the upper band (STARC Band+).
  • During a downtrend, it may be favorable to short near the upper band and cover near the lower band.
  • When bands are breached it can signal a trend change. For example, during an uptrend, if the price falls sharply through the lower band it could signal the uptrend is over.
  • When the price action is choppy or ranging, the same general guidelines apply: favor buying near the lower band, selling near the upper band, and significant breaches of either band could mean the range is over.
  • The SMA length is chosen by the trader and is typically between five and 10 periods.
  • The trader can also choose how far above the SMA the upper and lower bands are, based on the ATR multiple. Placing the bands at +/- two ATR is common.

The Formula for Stoller Average Range Channel (STARC) Bands Is:

How to Calculate STARC Bands

  1. Choose an SMA length. Five to 10 periods is common for STARC Bands.
  2. Choose an ATR multiple. Two times ATR is common, although this can be adjusted as needed.
  3. Calculate the SMA.
  4. Calculate the ATR, and then multiply it by the multiple chosen.
  5. Add the ATR x multiple to the SMA to get STARC Band+.
  6. Subtract the ATR x multiple from the SMA to get STARC Band-.
  7. Calculate the new values as each period ends.

What Do STARC Bands Tell You?

STARC bands are a type of envelope channel that provides potential support and resistance levels.

STARC bands follow basic price channel trading methodology. The top band is considered to show the security’s resistance price level and the bottom band is considered to show the security’s support price level.

The basic trading strategy is to sell when the security’s price is near the resistance band and buy when the security’s price is near the support band. Favor this strategy when the price is in an overall uptrend or when the price is ranging. When the price is in an overall downtrend, favor shorting near the upper resistance band and covering near the lower support band.

One thing to be aware of is that the price can move along a band for extended periods of time. This may mean a trade that looks good in the moment could turn out to be quite poor as the price continues to move along the band. For example, imagine selling a long position when the price reaches the upper band, only to watch as the price and upper band continue to move higher for some time.

Traders can use various average true range multipliers to influence the width of the bands. The larger the multiple the wider the bands. The smaller the multiple the tighter the bands. Longer-term traders may prefer wider bands while shorter-term traders may prefer narrow bands in order to potentially catch more trading opportunities.

The Difference Between STARC Bands and Bollinger Bands®

STARC bands and Bollinger Bands® are similar in that they create bands around a simple moving average. STARC bands add and subtract an ATR multiple to form the bands. Bollinger Bands® add and subtract a standard deviation multiple to form the upper and lower bands. The interpretation of the bands is similar, but the calculations are different. Therefore, the two indicators will look slightly different on a chart.

The Limitations of Using STARC Bands

While STARC bands can be used to signal potential trading opportunities near the bands, the main problem is that the bands are always moving. Buying near the lower band may look good, but if the lower band and price keep dropping then the signal provided was poor. This will happen frequently, as the price will reach a band but then the band keeps moving in that direction.

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To help remedy this issue, utilize stop losses when taking trades near the bands, as this will help control risk if the price keeps moving against the position. Also, instead of taking profits when the price reaches a band, consider a tight trailing stop loss instead. This allows for the price to continue moving along the band, which increases profit. If the price does reverse, a profit is still locked in.

STARC bands — indicator for MetaTrader 5

This is a version of STARC bands with some deviations compared to the original bands .

By definition STARC bands are :

STARC (Stoller Average Range Channels) show three lines which create a channel around an ordinary moving average. These three lines are:

  • An n–period Simple Moving Average (SMA).
  • An upper band, which is the n-period SMA plus an m-period Average True Range (ATR) multiplied by a constant K.
  • A lower band, which is the n-period SMA minus an m-period ATR multiplied by a constant K.

STARC bands were developed by Manning Stoller.

Usage :the STARC Bands tend to define upper and lower limits for normal price action. Therefore, some traders use STARC bands to determine the level of risk prior to entry.

  • has two bands (not just one) which are drawn as a filled channel
  • it allows usage of any of the basic 4 type of averages for calculating the basic value of STARC and for ATR calculation — that way we can have variations that were not part of the original bands
  • it has a set of 22 types of prices

It is a multi time frame version already

Important update : version 1.2 is now compatible with back-testing in multi time frame mode too

The criteria for color candles is as simple as it gets : STARC bands are calculated using one average — along with it a «fast» average of a same type and price is calculated, and if the fast average is crossing slow average up, color of the candle is changed to color for up, and in color for down if the fast average crosses the slow average down. Setting the fast period to 9 Nov 2020 at 12:09

Hi, there is a bug in MTF mode. Both version.

M1 Chart => H1 timeframe, H1 Chart => D1 timeframe.

2020.11.09 11:59:26.956 starc_bands (EURUSD,M1) cannot load custom indicator ‘starc_bands’ [4802]
2020.11.09 12:06:15.427 starc_bands_1.1 (EURUSD,H1) cannot load custom indicator ‘starc_bands_1.1’ [4802]

Hi, there is a bug in MTF mode. Both version.

M1 Chart => H1 timeframe, H1 Chart => D1 timeframe.

2020.11.09 11:59:26.956 starc_bands (EURUSD,M1) cannot load custom indicator ‘starc_bands’ [4802]
2020.11.09 12:06:15.427 starc_bands_1.1 (EURUSD,H1) cannot load custom indicator ‘starc_bands_1.1’ [4802]

Error 4802 is an error that happens with any of the indicators that are calling some other indicator (or itself), especially on weekends when there are no new ticks or when the higher time frame is called for the first time after the initialization.

That is why the handle is checked and re-checked and when that error is cleared, it continues normal operation. That is an issue of mt not of the code. The indicator works as it is supposed to work once when it gets a «pass» by that error 4802 (it can not be forced to wait from an indicator since we can not make the indicator «sleep» to force some action until it is cleared — hence we have to wait for the next occasion to pass through the 4802 «gate»). You also have noticed that it continues to work as it should once when it gets a new tick after that error when used on live charts

All this above said is for real time usage on live charts — back-testing can not be conducted in that mode of multi time framing

Finding a possible work-around of back-testing issues (the error that you got was from back-testing) was not a goal of this type of code. The goal was to make it work as it should in an «as simple as it gets» mode in normal usage.

Without going into «heavy explanation» why that issue was happening in back-test and it was not in real time, added a version (version 1.2) that solves back-testing issue too

In order to make this version compatible with both previous version, added an option to show candles (as in version 1.1) or hide them (as in version 1.2) so both modes can be emulated with the version 1.2 now

The upgraded indicator: now it has new price types and different display type.

The newest version of ALMA.

Gann swingchart and hybrid ZigZag implementation.

STARC Bands

Это трендовый индикатор, придумал его Мэннинг Столлер в 1980 году. То есть он служит для трендовой торговли по пробою диапозона.

Средняя полоса = SMA(n) = SMA(5)
Верхняя полоса = SMA(n) + (ATR(m)*K) = SMA(5) + (ATR(15)*1,33)
Нижняя полоса = SMA(n) – (ATR(m)*K) = SMA(5) – (ATR(15)*1,33)

Полосы Столлера — это три линии, которые образуют канал. По названию и по принципу работы, данный индикатор похож на Полосы Боллинджера — полосы STARC сжимаются на нейтральных рынках и расширяются на волатильных рынках. Но есть отличия — они не учитывают квадратное отклонение и строятся не на ценах закрытия, а на ATR (средний истинный диапозон).

Открывать позиции по нему можно, когда цена пересекает границы STARC и закрепляется там, а вот стоп-ордер выставляется на средней линии.

Также можно использовать торговлю по отскокам от границ канала, но в этом случае нужно изменить параметр К с1.33 на 3.0. Чтобы усилить данные сигналы, фильтруйте их с помощью осцилятора RSI (перекупленность/перепроданность).

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