Definition – What does Stoller Average-Range Channels (STARC) mean?
The Stoller Average-Range Channels (STARC) is a technical volatility indicator that is used to create a statistical envelope around a simple moving average. This envelope, also referred to as a channel, allows traders to easily see whether a currency pair’s price action is approaching the support or resistance levels of the channel. Like Bollinger bands, the upper band (STARC +) and lower band (STARC -) squeeze closer together in low volatility markets and expand in times of high volatility.
The indicator is named for its creator, Manning Stoller, and is also referred to as STARC bands.
ForexTerms explains Stoller Average-Range Channels (STARC)
STARC operates in a similar manner as Bollinger bands, but the channel is set out further using the average true range (ATR) rather than standard deviations from the simple moving average (SMA). In simple terms, STARC + is the SMA plus the ATR for the time period. STARC – is the same SMA minus the ATR for the time period. When either band is approached or breached, a trader can usually expect the price action to reverse towards the center of the channel.