STARCBands

การจัดอันดับของโบรกเกอร์ตัวเลือกไบนารี:
  • Binarium
    Binarium

    อันดับที่ 1 ในการจัดอันดับโบรกเกอร์ตัวเลือกไบนารี!

  • Binomo
    Binomo

    อันดับที่ 2 ในการจัดอันดับ! นายหน้าที่เชื่อถือได้

STARCBands

Description

The Stoller Average Range Channel (STARC) Bands are two bands plotted around a short-term simple (base) moving average. The bands are placed a specified number of Average True Ranges above and below the base moving average.

The Upper and Lower bands represent overbought and oversold price levels respectively.

Input Parameters

Parameter Description
price The price used to calculate the STARC Bands.
atr length The number of bars used to calculate the True Range moving average.
sma length The number of bars used to calculate the base moving average.
displace The number of bars to shift the STARC Bands. Positive numbers signify a backward displacement.
multiplier factor The factor to multiply the True Range average by, to define the offset of the bands from the moving average.

Plots

Plot Description
Upper_Band The upper STARC Band.
Middle_Band The simple moving average.
Lower_Band The lower STARC Band.

Example*

*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.

This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.

Market volatility, volume and system availability may delay account access and trade executions.

Past performance of a security or strategy is no guarantee of future results or investing success.

Trading stocks, options, futures and forex involves speculation, and the risk of loss can be substantial. Clients must consider all relevant risk factors, including their own personal financial situation, before trading. Trading foreign exchange on margin carries a high level of risk, as well as its own unique risk factors.

Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Prior to trading options, you should carefully read Characteristics and Risks of Standardized Options.

Spreads, Straddles, and other multiple-leg option orders placed online will incur $0.65 fees per contract on each leg. Orders placed by other means will have additional transaction costs.

Futures and futures options trading is speculative and is not suitable for all investors. Please read the Risk Disclosure for Futures and Options prior to trading futures products.

การจัดอันดับของโบรกเกอร์ตัวเลือกไบนารี:
  • Binarium
    Binarium

    อันดับที่ 1 ในการจัดอันดับโบรกเกอร์ตัวเลือกไบนารี!

  • Binomo
    Binomo

    อันดับที่ 2 ในการจัดอันดับ! นายหน้าที่เชื่อถือได้

Forex trading involves leverage, carries a high level of risk and is not suitable for all investors. Please read the Forex Risk Disclosure prior to trading forex products.

Futures and forex accounts are not protected by the Securities Investor Protection Corporation (SIPC).

Futures, futures options, and forex trading services provided by TD Ameritrade Futures & Forex LLC. Trading privileges subject to review and approval. Not all clients will qualify. Forex accounts are not available to residents of Ohio or Arizona.

Access to real-time market data is conditioned on acceptance of the exchange agreements. Professional access differs and subscription fees may apply. For details, see our Professional Rates & Fees.

Supporting documentation for any claims, comparison, statistics, or other technical data will be supplied upon request. TD Ameritrade does not make recommendations or determine the suitability of any security, strategy or course of action for you through your use of our trading tools. Any investment decision you make in your self-directed account is solely your responsibility.

TD Ameritrade, Inc., member FINRA/SIPC.

TD Ameritrade Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc., and the Toronto-Dominion Bank © 2020 TD Ameritrade IP Company, Inc. All rights reserved. Used with Permission.

How to Use Starc Bands: One Of My Favorite Chart Tools of All Time

A common problem for both investors and traders is that they buy too high and sell too low. Everyone at some time has picked a stock or ETF to buy only to see the market take off without them.

Often times the market will move up for several days in a row increasing the frustration and the urge to buy. Finally some will throw caution to the wind and buy only to see the market reverse back to lower levels which may stop them out.

The same pitfall can impact investors who hold on to a stock in their portfolio as it starts to fall. Selling out the position can mean that the investor has to “face up” to their mistake.

This is hard for anyone to do but finally when they sell out their position it will often rally 1-2% or more just after you get out.

Managing risk is a key factor in profitable investing or trading. If you can avoid selling near a short term low or buying near a short term high it will definitely improve your overall results.

“Starc bands” were developed in the mid-1980s by the late Manning Stoller, with whom I had the pleasure of teaching technical analysis in many cities around the world.

Starc stands for the “Stoller Average Range Channel,” and by far, these are my favorite banding or channel techniques. It should be noted that they are interpreted much differently than Bollinger Bands.

The same formula is used on all markets and for any time frame and is as follows:

Starc+ = 6-period moving average + (2 x 15-period Average True Range) (ATR)
Starc- = 6-period moving average – (2 x 15-period Average True Range) (ATR)

The Average True Range (ATR) was developed by Welles Wilder and a fourteen period ATR is used for starc bands.

The beauty of the starc bands is that unlike most indicators or methods, they can tell you when it is a high- or low-risk time to buy or sell. Using two times the ATR, Stoller estimated that 90% of the price activity should stay within the bands.

Starc+ and Starc-

As for interpretation, if prices are near the “starc+” bands, it is a high-risk time to buy and a low-risk time to sell.

Conversely, when prices are near the “starc-” band, it is a low-risk time to buy and a high-risk time to sell if the other technical indicators agree with the starc band warnings.

Many of you may remember the stock market action on Wednesday October 15th when stocks and bonds were both plunging in early trading. At the time several well know media analysts had just proclaimed the start of a new bear market.

The PowwerShares QQQ Trust (QQQ) had closed on the lows the previous Friday at $93.66. The lower starc band (starc-) for the following week was not much lower at $93.08. The low early Wednesday at $89.42 was 4.5% below the weekly band.

The daily chart of QQQ on the right shows that it had also closed near the daily starc- band (see arrow). The lows on both Wednesday and Thursday exceeded or tested the starc- band. Though there were no clear signs of a bottom the fact that the QQQ was trading below both the weekly and daily starc- bands confirmed that it was a high risk time to sell or to establish new short positions.

The rally from these lows was relentless and on November 28th the QQQ closed at $104.88 (point 2) which was just above the daily Starc+ band at $104.80. Over the next twelve days the QQQ dropped 5.6% to close below the daily Starc- band.

The daily starc bands can also give you quite a bit of insight even in choppy markets. The PowerShares QQQ Trust (QQQ) closed at a new high on the first day of trading in March 2020 before declining for the next eight days.

This correction took prices to the starc- band for three consecutive days, point 1, before the QQQ turned higher. After three strong days on the upside some may have been tempted to buy but the rally topped out just two days later (point 2).

Over the next four days the QQQ lost over 3% to close on the daily starc- band. The lows held on a retest in early April before the QQQ started a three week rally. On both April 24th and 25th the QQQ reached the starc+ band (point 4) and even though prices had surpassed the March highs the starc band analysis warned it was not the time to buy.

In the next seven days of trading the QQQ dropped 3.8% and came close to the starc- band before developing a range that lasted until late June when the starc- band was tested for two consecutive days (point 5). The QQQ moved sideways for three days, a normal reaction after the starc- band is tested, before dropping to marginal new lows.

The rally from the lows was impressive as the Nasdaq 100 and the Nasdaq Composite both made new highs on July 20th as the starc+ band was tested (point 6). The new highs in both averages received considerable attention in the media that could have tempted some to buy.

The Nasdaq 100 Advance/Decline line had peaked in May and had formed lower highs in June. As I pointed out on July 21st (“Narrow Advance Warrants Caution” ) the A/D line just reached its downtrend which was key resistance. This was a sign of weakness as it indicated that just a few stocks were pushing the Nasdaq 100 to new highs.

Often when one sees an extreme price the tendency is to take action which often results in one getting in or out at the worst price. The panic open on August 24th briefly pushed many ETFs to absurdly low prices in the first few minutes of trading. There were several stories in the press about financial advisors who sold on the opening as the wide swings were apparently the result of the inability to price individual components of many ETFs.

On August 24th the Spyder Trust (SPY) dropped below the monthly, weekly and daily starc- band as it hit a low of $181.46 which was 5% below the monthly starc- band at $191.00. This was the most extreme reading since 2020. As of last week’s high the SPY had rallied over 11% from the August 24th low. For the week of September 20th the weekly starc- band stands at $188.72 with the daily at $192.46.

The formula for the starc bands is quite straightforward, it is not difficult to add it to most charting packages. In some cases Keltner channels can be modified to produce starc bands. First the moving average will need to be changed to six with two ATR added to or subtracted from this moving average.

I use these bands in both my investing and trading as I even run it on the mutual funds in my 401(k). I also use the bands to help determine a limit price to enter or exit a position.

As with any good indicator, I suggest that you work with it first, study it on several markets, and convince yourself that it can help you before using it on a real-time basis.

The Starc bands levels play a major role in my recommendations for both stocks and ETFs as they are often referred to in my Viper Reports. The Viper ETF Report provides specific buy and sell advice for traders as well as investors on both market tracking and sector ETFs

If you are a stock trader I typically make 1-3 new recommendations each week on either the long or short side in the Viper Hot Stocks Report. Each service is updated twice a week and is only $34.99 each per month. The subscription can be cancelled on line at any time.

New subscribers also receive four of Tom’s most recent trading lessons which are sent out regularly to subscribers.

Stoller Average Range Channel Bands – STARC Bands Definition and Uses

What are STARC Bands?

Commonly called STARC Bands, Stoller Average Range Channel Bands developed by Manning Stoller, are two bands that are applied above and below a simple moving average (SMA) of an asset’s price. The upper band is created by adding the value of the average true range (ATR), or a multiple of it. The lower band is created by subtracting the value of the ATR from the SMA.

The channel created by the bands can provide traders with ideas on when to buy or sell. During an overall uptrend, buying near the lower band and selling near the top band is favorable, for example. STARC bands can provide insight for both ranging and trending markets.

Key Takeaways

  • During a rising trend, when prices are making overall higher highs and higher lows, it may be favorable to buy near the lower band (STARC Band-) and sell near the upper band (STARC Band+).
  • During a downtrend, it may be favorable to short near the upper band and cover near the lower band.
  • When bands are breached it can signal a trend change. For example, during an uptrend, if the price falls sharply through the lower band it could signal the uptrend is over.
  • When the price action is choppy or ranging, the same general guidelines apply: favor buying near the lower band, selling near the upper band, and significant breaches of either band could mean the range is over.
  • The SMA length is chosen by the trader and is typically between five and 10 periods.
  • The trader can also choose how far above the SMA the upper and lower bands are, based on the ATR multiple. Placing the bands at +/- two ATR is common.

The Formula for Stoller Average Range Channel (STARC) Bands Is:

How to Calculate STARC Bands

  1. Choose an SMA length. Five to 10 periods is common for STARC Bands.
  2. Choose an ATR multiple. Two times ATR is common, although this can be adjusted as needed.
  3. Calculate the SMA.
  4. Calculate the ATR, and then multiply it by the multiple chosen.
  5. Add the ATR x multiple to the SMA to get STARC Band+.
  6. Subtract the ATR x multiple from the SMA to get STARC Band-.
  7. Calculate the new values as each period ends.

What Do STARC Bands Tell You?

STARC bands are a type of envelope channel that provides potential support and resistance levels.

STARC bands follow basic price channel trading methodology. The top band is considered to show the security’s resistance price level and the bottom band is considered to show the security’s support price level.

The basic trading strategy is to sell when the security’s price is near the resistance band and buy when the security’s price is near the support band. Favor this strategy when the price is in an overall uptrend or when the price is ranging. When the price is in an overall downtrend, favor shorting near the upper resistance band and covering near the lower support band.

One thing to be aware of is that the price can move along a band for extended periods of time. This may mean a trade that looks good in the moment could turn out to be quite poor as the price continues to move along the band. For example, imagine selling a long position when the price reaches the upper band, only to watch as the price and upper band continue to move higher for some time.

Traders can use various average true range multipliers to influence the width of the bands. The larger the multiple the wider the bands. The smaller the multiple the tighter the bands. Longer-term traders may prefer wider bands while shorter-term traders may prefer narrow bands in order to potentially catch more trading opportunities.

The Difference Between STARC Bands and Bollinger Bands®

STARC bands and Bollinger Bands® are similar in that they create bands around a simple moving average. STARC bands add and subtract an ATR multiple to form the bands. Bollinger Bands® add and subtract a standard deviation multiple to form the upper and lower bands. The interpretation of the bands is similar, but the calculations are different. Therefore, the two indicators will look slightly different on a chart.

The Limitations of Using STARC Bands

While STARC bands can be used to signal potential trading opportunities near the bands, the main problem is that the bands are always moving. Buying near the lower band may look good, but if the lower band and price keep dropping then the signal provided was poor. This will happen frequently, as the price will reach a band but then the band keeps moving in that direction.

To help remedy this issue, utilize stop losses when taking trades near the bands, as this will help control risk if the price keeps moving against the position. Also, instead of taking profits when the price reaches a band, consider a tight trailing stop loss instead. This allows for the price to continue moving along the band, which increases profit. If the price does reverse, a profit is still locked in.

การจัดอันดับของโบรกเกอร์ตัวเลือกไบนารี:
  • Binarium
    Binarium

    อันดับที่ 1 ในการจัดอันดับโบรกเกอร์ตัวเลือกไบนารี!

  • Binomo
    Binomo

    อันดับที่ 2 ในการจัดอันดับ! นายหน้าที่เชื่อถือได้

ตัวเลือกไบนารีและอัตราแลกเปลี่ยน
Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: