What it is
Manning Stoller designed STARC bands to judge risk and reward at a glance. The middle line is a very short average that hugs price, and the bands sit a fixed number of ATRs away, so they widen with volatility.
They are less about signals and more about location. If you buy close to the upper band, the distance to a normal stop is large and the room to run is small. Buying near the lower band in an uptrend gives the reverse.
How it is calculated
1. Take a 6 period simple moving average of the close (the length). 2. Work out the average true range over 15 candles (the ATR length). 3. Upper band = average plus 2 times ATR. 4. Lower band = average minus 2 times ATR.
Settings
| Setting | Default | Range | What it changes |
|---|---|---|---|
| Length | 6 | 2 to 200 | Candles in the middle average. Short by design so the bands follow price closely. |
| ATR length | 15 | 2 to 200 | Candles in the average true range that sets the band width. |
| Multiplier | 2 | 0.5 to 6 | ATRs from the middle to each band. Higher values mean price reaches the bands less often. |
How to read it
How to trade it
- 1
Decide the trend on a higher timeframe first, for example price above the 50 period average on 1 hour gold.
- 2
On the 15 minute chart, only buy when price is in the lower half of the STARC bands, ideally after touching the lower band and closing back up.
- 3
Place the stop just beyond the lower band, often 6 to 10 points on 15 minute gold.
- 4
Take profit at or near the upper band.
- 5
On US30, apply it the other way in a downtrend: sell near the upper band, cover near the lower band.
A buy near the lower band is proved wrong when price closes below the lower band twice in a row, showing the move is stronger than normal volatility and the pull-back is turning into a reversal.
WickSpeak runs in your browser with nothing to install. When you add STARC bands, it writes a plain-English reading on the live candle: what the indicator is, what it is doing right now, how to trade it and what would prove that reading wrong. It says where price sits between the bands, how many points to each band, and whether that location favours buying, selling or waiting.
In Playbook, our no-code strategy builder, STARC bands can be a condition in a play. It can test whether STARC bands: price closes above the upper band; price closes below the lower band; price is inside the bands; price is above it; price is below it. Each condition can run on any of 12 timeframes from 1 minute to weekly, combined with up to 11 others, and the play can be backtested on past candles with your own costs and turned into alerts on screen, by email or by phone push.
Best markets and timeframes
Useful on gold, indices and forex on 5 minute to 4 hour charts for timing entries and exits within a trend found on a slower chart.
Common mistakes
- Using band touches as reversal signals against a strong trend.
- Confusing STARC with Keltner Channels; STARC uses a short simple average and is tighter around price.
- Ignoring news candles that blow through both bands.
Works well with
Questions traders ask
What does STARC stand for?
Stoller Average Range Channel, after Manning Stoller who developed it. The bands are based on the average true range around a short moving average.
What are the default STARC band settings?
A 6 period simple moving average with bands at 2 times a 15 period ATR. Some traders use multipliers of 1.5 to 3 depending on the market.
What is the difference between STARC bands and Keltner Channels?
Both use ATR for width. Keltner Channels usually use a longer exponential average, around 20 periods, while STARC uses a 6 period simple average, so it sits much closer to price.
Should I buy when price touches the lower STARC band?
Only when the larger trend is up and price shows signs of turning, such as a close back above the band. In a downtrend, the lower band can be touched repeatedly.