Placing Channels on Stock Indices Charts on the MT5 Platform

The third option on the insert menu on the MT5 software is the channels button. The channels button is used to insert various types of channels on Indices Trading charts on the MT5 platform. The channels button is shown below.

Menu Button for Placing Various Channel Tools on the MT5 Platform

The channels that can be placed on the stock indices charts are shown on the channels button menu are:

1. Fibonacci Channels
2. Linear Regression Channels
3. Equidistant Channels
4. Standard Deviation Channels

All these channels have different stock indices technical analysis and are drawn differently on the MetaTrader 5 Indices charts.

Fibonacci Channels

Fibonacci Channels is a type of channel that is automatically drawn by this Fibonacci Channels button, To draw these Fibonacci channels, a Indices trader selects two points where to draw the same way a indices trend line is drawn on the MetaTrader 5 Platform, once this indices trend points are joined, the Fibonacci channels drawing tool uses these points to draw the first indices trend line and then automatically draws another 5 lines that form channels - these channels are used as profit taking levels to book profits once the stock indices price reaches these points.

Fibonacci levels used to draw these channels are: 0.618, 1.000, 1.618, 2.618, 4.236: The most commonly used channels are the first two channels as shown below:

Placing Fibonacci Channels on MT5 Indices Charts

Linear Regression Channels

Linear regression channels are self adjusting channels, that adjusts as the channel is drawn from point 1 to point 2, the linear regression channels then form what is similar to a indices price boundary, this stock indices price boundary shows upper and lower stock indices price boundary and the center point which is the mean for the indices price.

These upper and lower channels are used to open stock indices trades and close stock indices trades and also determine the levels to take profits or set stops for stock indices trades. Linear regression channels are shown below:

Placing Linear Regression Lines on MT5

Equidistant Channels

The equidistant channels is the most commonly used channel in indices trading. On the MT5 platform, a indices trader can draw an upward channel or downward channel, the stock indices trading example explained and illustrated below shows an upward Indices Trading channel, once the lower channel is drawn ( indices trend line), the top channel is automatically drawn, a Indices trader can then double click the upper channel to adjust it so that it touches the highest high of stock indices price as shown below - the next time stock indices price touches this line the buy indices trade will then be closed and profit taken. As shown below this was the best stock indices price to take profit when stock indices price in the upward indices trend touched the upper channel.

Placing Equidistant Channels on MT5

Standard Deviation Channels

Standard Deviation channel is similar to Linear Regression channel and it is also used to set the upper and lower boundaries within which stock indices price should move within. The Standard Deviation channel is shown below.

Placing Standard Deviation Channels on MT5