Stoller Average Range Bands – STARC Bands – is used in trend trading where a range breakout is considered. This Client Side VTL indicator draws the STARC bands on chart. STARC bands are three bands forming a channel around a simple moving average. The indicator is similar to Bollinger Bands but does not use standard deviations in its calculation. It is calculated by means of Average True Range (ATR) providing more detailed information on market volatility.
STARC bands is used in two modes. First one is as a trend following indicator. For this enter 1.33 for parameter KATR. Now when price breaks out of the bands, there is a high probability that price move will continue in that direction. Open positions in the breakout direction.
To use STARC bands as an oversold overbought indicator, make parameter KATR 3. Now when the price reaches the bands, chances are that it is a short-term price extreme. Countertrend trades can be opened here.
- MA_Period – Moving Average Period
- ATR_Period – Average True Range Period
- KATR – ATR multiplier
- Shift – Number of bars to shift forward