Stoller Average Range Channel (STARC) bands indicator is the combination of two indicators,
- Simple moving average (SMA).
- Average true range (ATR).
STARC Bands indicator has 3 lines that create a channel or bands.
- the middle line of the channel is a 5-period simple moving average.
- and the above line is created by adding Average true range value on the simple moving average.
- and below the line is created by subtracting the average true range value from the simple moving average.
STARC Bands Setting
- Period: the Default period of Stoller Average Range Channel bands indicator is 15. this means the indicator will take 15 periods price to calculate this indicator.
- MA Period: as I already discussed, this is the middle line of the Stoller Average Range Channel indicator. the middle line is the 5 periods simple moving average line.
- Multiplier: This multiplier value will be multiplied by the ATR value and then the total value will add or substrate with the simple moving average value and create the upper and lower line. the default value is 1.3. means the ATR value will be multiplied by 1.3 value. then the result value will add or subtract with the SMA value to create a proper channel.
- Channel Fill: using Channel fill the channel gap will fill by the color.
- STARC Bands top: this is the upper line color.
- Median: This is the middle Line color.
- Bottom: this is the lower line color.
Stoller Average Range Channel bands Calculation
Formula: The Median line=simple 5 period moving average. Top bands = (1.3*ATR)+5 period SMA. Bottom Bands= 5 period SMA - (1.3*ATR).
STARC Bands Trading Strategy
- Buy the stock when the share price candlestick is below bottom bands or near the bottom bands and price started reversing to the upward direction, this is the buying signal.
- you can sell the stock when the stock price candlesticks are above the top bands or near the top bands, and price reversing to the downside then short sell opportunity created.
- if most of the candlestick of STARC Bands indicator is forming above the middle line which indicating the bullish trend.
- if most of the candlesticks of this indicator are forming below the middle line, this is the indication of the bearish trend.
- The best use of this you can use this combined with the other indicator, another indicator is like RSI, MACD, gator or etc, etc indicator, use both the indicator in one chart and when both the indicator is giving positive or negative signal then go with that for better accuracy.
Stoller Average Range Channel (STARC bands) will plot bands on the candlestick of the share price and tells you where to buy and where to sell. to get more accurate trading signals use this indicator with a combination of other indicators.
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