# Stoller Average Range Channels (STARC Bands)

### Description

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.

### Interpretation

Similar to Bollinger Bands®, STARC bands tighten in steady markets and loosen in volatile markets. However, rather than being based on the closing prices used by Bollinger Bands, the STARC bands are calculated using the Average True Range (ATR), thus giving a more in-depth snapshot of market volatility.

When a price curve penetrates a Bollinger Band, it may indicate the continuation of a price move; in contrast, 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.

### Parameters

1. n, the number of periods used to calculate the SMA shown by the middle line. Default: 5 periods.
2. m, the number of periods used to calculate the ATR used to create the upper and lower bands. Default: 15 periods.
3. K, a constant value used to plot the upper and lower bands (the higher the value, the more pronounced are the upper and lower bands). Default: 1.33.

### Algorithm

The following calculations are illustrated using the default parameters (5, 15, 1.33). Click on the links to go to more detailed algorithms for SMA and ATR.

Middle band: a Simple Moving Average (SMA) over n periods.
Middle = SMA(n) = SMA(5)

Upper Band: the SMA of the middle band plus an Average True Range (ATR) over m periods multiplied by K.
Upper = SMA(n) + (ATR(m)*K) = SMA(5) + (ATR(15)*1.33)

Lower Band: the SMA minus the ATR.
Lower = SMA(n) - (ATR(m)*K) = SMA(5) - (ATR(15)*1.33)

This is for general information purposes only - Examples shown are for illustrative purposes and may not reflect current prices from OANDA. It is not investment advice or an inducement to trade. Past history is not an indication of future performance.

Trading FX and/or CFDs on margin is high risk and not suitable for everyone. Losses can exceed investment.