Setting Channels on Stock Indices Charts on the MT5 Software

The third option on insert menu on MT5 software is the channels button. The channels button is used to insert various types of channels on Indices Trading charts in MetaTrader 5 software. The channels button is illustrated below.

Menu Button Key for Placing Various Channel Tools in MT5 Platform

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

Stock Indices Trading Fib Channels
Linear Regression Channels
Equidistant Channels
Standard Deviation Channels

All these channels have different stock technical analysis & are drawn differently on the MT5 charts.

Stock Indices Trading Fib Channels

Fibonacci Channels is a type of channel that is automatically drawn by this Fibo Channels button, To draw these Fib channels, a stock indices trader chooses two points where to draw the same way a trend line is drawn on the MT5 Platform, once this trend levels are connected, the Fibo channels drawing tool uses these points to draw the first indices trendline & then automatically draws another five lines which form channels - these channels are used as profit taking levels to take profits once the stock price gets-to these levels.

Fibonacci levels used to draw these channels are: 0.618, 1.000, 1.618, 2.618, 4.236: The most commonly used channels are first 2 channels as displayed and shown below:

Placing Fibonacci Channels on MT5 Charts

Linear Regression Channels

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

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

Placing Linear Regression Lines in MetaTrader 5

Equi-distant Channels

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

Placing Equidistant Channels in MetaTrader 5

Standard Deviation Channels

Standard Deviations channel is similar to Linear Regression channel and it's also used to set the upper & lower boundaries within which price should move within. The Standard Deviations channel is displayed & shown below.

Placing Standard Deviations Channels in MetaTrader 5

Learn More Lessons & Tutorials:

Trade Stock Indices

Setting Channels on Stock Indices Charts on the MT5 Software

Stock Indices Trading Fib Channels

Linear Regression Channels

Equi-distant Channels

Standard Deviation Channels