(for use in the PDF)
Another 5 minute price chart with Bollinger bands and Starc bands >>>
We note that, when the Starc bands are falling very rapidly, then the price action goes outside the Starc bands.
The price action goes outside the lower Starc bands.
The same thing occurs when the Starc bands rise very steeply.
In that case the price action goes outside the upper Starc bands.
(for use in the PDF)
[B]Trading with the Starc Bands[/B]
There are 2 important matters to note when trading with the Starc bands on a 5 minute chart…
The direction of the mid Bollinger band.
The direction of the Starc bands.
The mid BB must be going at least level, but preferably in your profit direction (not against you).
The Starc bands must be going at least level, but preferably in your profit direction.
Therefore, we can have…
mid BB level, Starc bands level.
mid BB level, Starc bands in your profit direction.
mid BB in your profit direction, Starc bands level.
mid BB in your profit direction, Starc bands in your profit direction.
In any of the 4 combinations above, we have a case of [B]AGREEMENT[/B].
If either (or both) of the mid BB and Starc bands are [U]going against you[/U], then we have a case of [B]DISAGREEMENT[/B].
In a case of [B]DISAGREEMENT[/B] we [U]do not trade[/U], and if we are already in a trade and this happens, it is a sign that we may need to get out of the trade.
(for use in the PDF)
Trading with Level Starc Bands
The schematic diagram of a 5 minute chart below shows how to enter and exit with level starc bands >>>
Explanation
In this drawing, the mid Bollinger band has been drawn level.
Note that the mid Bollinger band does not have to be level - it can also be going in your profit direction.
What the mid Bollinger band must not be doing, is going against you.
The area inside the Starc bands has been coloured to improve clarity - a normal price chart will not show these colours.
The black line shows a price action.
The green dots are a long trade, the red dots a short trade.
The Rules for a Level Starc Bands Trade
A PCI stop loss is set on the main chart about 3 pips away from the extreme point of the candlestick pattern.
The 5 minute chart with Bollinger bands and Starc bands is then opened.
The 1st amount entry, E1, is made on the 0.7 line.
The 2nd amount entry, E2, is made a little later, at a better price, to try to improve the total entry. (the computer will average the 2 entries).
The exit, X, is made with both amounts, at the opposite outer Starc band.
Tymen:
Thank you for this exciting refresher. It helps me to rewind the lessons learnt. Looking forward for more. I know its late in the night for you now. I hope i can get some more before i go to bed …Greedy me:D:D
Regards,
Muthu.
(for use in PDF)
Trading with Starc Bands going Up or Down
The schematic diagram of a 5 minute chart below shows how to enter with starc bands going up (trading long) or going down (trading short) >>>
Explanation
For the purposes of clarity, the mid Bollinger band has not been shown in this drawing.
Note that the mid Bollinger band need to be going in one of two directions - either level, or in your profit direction.
What the mid Bollinger band must not be doing, is going against you.
The area inside the Starc bands has been coloured to improve clarity - a normal price chart will not show these colours.
The black line shows a price action.
The green dots are a long trade, the red dots a short trade.
The Rules for a Going Up/Going Down Starc Bands Trade - Entries
A PCI stop loss is set on the main chart about 3 pips away from the extreme point of the candlestick pattern.
The 5 minute chart with Bollinger bands and Starc bands is then opened.
The 1st amount entry, E1, is made immediately.
The 2nd amount entry, E2, is made a little later, at a better price, to try to improve the total entry. (the computer will average the 2 entries).
(for use in the PDF)
Trading with Starc Bands going Up or Down (continued)
Explanation
The area inside the Starc bands has been coloured to improve clarity - a normal price chart will not show these colours.
The black line shows a price action.
The green dots are a long trade, the red dots a short trade.
The Rules for a Going Up/Going Down Starc Bands Trade - Exits
There are 2 types of exits…
A good exit.
A basic exit.
An exit is done with both amounts at the same time.
A good exit is made when an the price action moves to an extreme point outside the Bollinger band.
If this happens with 2 or 3 candles in a row, then this extreme exit should be seen as a great opportunity and seized upon.
If the extreme price action does not occur, then an exit is made when the Starc bands move back inside the Bollinger bands and turn in the opposite direction.
In the short trade, the good exit is shown in red, the basic exit is shown in purple.
In the long trade, the good exit is shown in light green, the basic exit is shown in dark green.
(for use in the PDF)
Trading with Starc Bands going Up or Down (continued)
EXAMPLE
We now look at an example 5 minute price action chart with Bollinger bands and Starc bands, and follow thro the steps >>>
Explanation
The Bollinger bands are in blue.
Again, the Starc bands have been coloured for clarity.
The Stages in the Trade
This is a short trade.
The mid BB can be seen going up first, then down all the way.
The Starc bands are going down.
We go thro the numbers…
Therefore, there is DISAGREEMENT and there is no trade.
At this point of this short trade, the mid BB is also going down.
There is now AGREEMENT and we can trade.
Because the Starc bands are going down and not level, we enter our 1st amount immediately.
We improve on our 1st amount entry with our 2nd amount entry at a better price. The computer will average our 2 entries.
Because the Starc bands are going down and not level, we do not exit here.
The Starc bands turn upward (DISAGREEMENT) and we get the best exit for 2 amounts that we can.
The Starc bands turn down again and we have AGREEMENT again.
Again we enter a 1st amount.
Again we improve on the 1st amount entry with the 2nd amount.
We do not exit here because the Starc bands are going down and not level.
We have a good exit and not a basic one, so we exit 2 amounts here.
I now return to a trading example.
Have a look at the 35 minute main chart below >>>
The chart is of a long engulfing pattern with the BB turned down very slightly - a caution is called for.
We now turn to the 5 minute chart >>>
We immediately notice that the starc bands are going up and the mid BB is level.
Since this is a long trade, we have AGREEMENT.
Nevertheless, we make a cautious immediate entry - cautious because the mid BB in the main chart is going down slightly.
The 5 minute chart >>>
The price action has gone against us in this 1st 5 minute candle.
We see that the mid BB is still level (just) and we make our 2nd amount entry going long.
The computer average is shown.
Lets see what happens.
Final 5 minute chart >>>
Yes, a good trade going long. 
The exit area is shown and the exit is made in accordance with the exit rules for Starc bands going up/down.
EXERCISE!!
OK, now its your turn to do some work!!
Have a look at the following 5 minute chart >>>
Which way is the mid BB going?
Which way are the Starc bands going?
Is there AGREEMENT or DISAGREEMENT?
Which way do you think the Bollinger bands are going on the main chart?
END.
UP
DOWN
DISAGREEMENT
Probably up, as the mid BB on the 5 minute has been going up for a while, and the bottom BB band is sharply returning to the mid band.
I will sit on my hands in this situation. There is a disagreement as mid bb is going up and starc going down. Regarding bollinger bands on the main chart…well it coud be slightly starting to show upward movement (i am not 100% sure about the second part of the answer on bb)
Regards,
Muthu
Chennai, India.
Dodge:
I liked the way you answered the questions in a typical q&a format. Hmmm long time since i finished school and took exams 
Muthu.
Thank you [B]DodgeV83 [/B]and [B]muthusai2000 [/B]for still being with me.
Answers are correct!!
I am going to bed now - its nearly 3.00 am here!!
zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz!!
And its 12:30 am here…Let me also take a nap…nite nite
You lazy people!
Like my friend used to say: you can sleep when your dead.
(it was pointless trying to tell him I was too tired for something)
Who stole my quote?
I used to say that as a kid already. 
Sorry [B]muthusai2000[/B], I am going to wake you up ( ) by answering these questions that you posted…
First, when the pattern forms on the main chart and if the third candle is already very close or breaching the middle bb can we still take the trade ???
Not really - unless the BB bubble is extremely wide so that there is potential for more pips.
But then, you will have to be very sure that the trade will continue.
[B]I have set some rules in place which I have yet to post…[/B]
Do not trade a pattern if the first candle of the pattern is passing thro (breaching) the mid BB.
Do not trade a pattern if the last candle of the pattern is very close or breaching the mid BB.
Do not take a trade if the BB are very narrow - there will not be enough pips in the trade.
Second, if we see the pattern formed on the main chart and when we switch to 5m and we find candles already close or going past the opposite outer starc / bb what do we do ? Take the trade or drop it ?
Neither!!
If the 5 min chart shows AGREEMENT with the mid BB and starc bands we …
level starc bands - wait for the correct 0.7 line set up.
non level bands starc bands - try to at least get a 1st amount entry on the inside of the starc bands.
Then improve on this with the 2nd entry.
If you cannot get this setup, forget the trade.
