Placing Channels on Charts on the MT4 Trading Software

The third option on insert menu on MT4 platform is the channels button. The channels button is used to insert various types of channels on charts in MetaTrader 4 platform. The channels button is pictured below.

Menu Button Key for Placing Various Channel Tools in MT4 Platform Software

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

Index Fib Channels
Linear Regression Channels
Equidistant Channels
Standard Deviation Channels

All these channels have different trading analysis and are drawn differently on the MT4 charts.

Stock Indices Fib Channels

Fib Channels is a type of channel that is automatically/mechanically drawn by this Fibo Channels button, To draw these Fib channels, one selects two points where to draw the same way a trend-line is drawn on the MT4 platform software, once this trend points are connected, the Fibo channels drawing tool uses these points to draw the first trend-line & then automatically draws another 5 lines that form channels - these channels are used as profit booking levels to book profits once the stock price gets-to these levels.

Fibo areas used to plot these channels are: 0.618, 1.000, 1.618, 2.618, 4.236: The most often used channels are first 2 channels as shown and displayed below:

Placing Fib Channels on MT4 Charts

Linear Regression Channels

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

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

Placing Linear Regression Lines on MT4

Equidistant Channel

The equi-distant channel is the most often used channel in indices trading. On MetaTrader 4 platform, a trader can draw an up-ward channel or downwards channel, the stock trading illustration explained & shown below shows an upward channel, once the lower channel is plotted ( trend line), the top channel is automatically/mechanically plotted, one can then double click 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 price in the upward trend touched the upper channel.

Placing Equidistant Channels in MT4

Standard Deviation Channels

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

Placing Standard Deviations Channels in MT4

Study More Tutorials:

Trade Stock Indices

Placing Channels on Charts on the MT4 Trading Software

Stock Indices Fib Channels

Linear Regression Channels

Equidistant Channel

Standard Deviation Channels