STARC Bands Trading Systems - MT4/MT5 Resources

If you are like me and have not heard of STARC (Staller Average Range Channel) bands before, they are similar to Bollinger Bands. These bands will contract and expand based on fluctuations in the average true range (ATR). The difference between Bolliner and STARC is that STARC bands are used to identify high probability trades rather than the standard deviation of price action. In short, when the price rises to the upper limit, it indicates a selling opportunity; when the price reaches the lower limit, it indicates a buying opportunity.

Basically, STARC is created from two bands around a user-defined SMA, the upper band is created by adding the SMA to the average true range (ATR), and the lower band is created by subtracting the ATR from the SMA. For a more detailed description of STARC, please visit http://www.investopedia.com/articles...dsChannels.asp.

When a fellow trader introduced this indicator in Nanningbob's post, Bluemelle and I thought that a simple trading strategy based solely on this indicator had great potential, as long as it was combined with sound money management and Nanningbob's famous multi-level recovery process. Surprisingly, despite its great potential, very little has been written about STARC. Therefore, I started this post to give STARC a FF home, I hope to attract experienced traders who are interested in this indicator and have ideas for its utilization and automation to post their ideas and creations for further research, improvement, development and review.

So far, Stevehopwood and Bluemele have created EAs (Expert Advisors) for the STARC system. We will discuss these issues in due course. I must strongly emphasize that this is very much an R&D topic at the moment and is not suitable for new traders and live trading. I highly recommend new traders to visit NanningBob and SteveHopwood's posts to learn about proven profitable systems and EAs.

Well, take a look at the chart below. The strategy is very simple. When the price hits the upper limit of the STARC band, place a sell order. When the price hits the lower limit of the STARC band, place a buy order. STARC's settings are 5,15,1.33 (or Bluemele's more aggressive setting of 5,15,0.88). Almost all of the rules below are suggested by Bluemele.

TP can be a fixed value based on ATR or mid-band (although a mid-band TP means you will lose money on big runs).

SL = distance from outside to mid-strip divided by 2 or a fixed value based on ATR.

If a loss occurs, new trades are suspended until the midpoint is reached. This will ensure that you don't continue to get caught up in the big trend. Typically you will have 1 or 2 losses and then it will retrace sharply so that it hits the midpoint in the near future. If it occurs on the same bar, then it is just a news spike and will most likely return to normal prices. (A more conservative option is to pause until the opposite range is reached).

If the trade is losing, press "x" (most likely % of ATR, a few pips) to re-enter on the same bar, then re-enter and hope to hit the midpoint to make a profit. Chances are it won't lose twice.

Using STEVE HOPWOOD's BE @ + x pips option for mptm plus a trailing stop, starting from x% of the distance between the entry point and the midpoint (usually 50%), the profit will be followed by x% of the profit (usually 20% to 50% of the total move, so if it goes up 10 pips, then TS=2 or TS=5 respectively. You can turn off the trailing stop and it will execute the TP at the midpoint.

See my STARC BOLLINGER CROSS post from October 10th/11th...
Several indicators added for BB-STARC Cross on October 11