Developed by Manning Stoller in the early 1980s, the bands will contract and expand depending on the fluctuations in the average true range component.
STARC (or Stoller Average Range Channels) bands are calculated to incorporate market volatility.
The original Stoller formula is:
Upper Band: SMA(6) + 2 * ATR(15)
Lower Band: SMA(6) – 2 * ATR(15)
The function of Starc Bands is different than other Bands based indicators.
If price action rises to upper band there is a high risk to buy and a lower risk to sell. As inverse, if price action rises to lower band there is a high risk to sell and a lower risk to buy.