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 different types of channels on charts in MT4 platform. The channels button is pictured below.

Menu Button Key for Setting 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 distinct analyses and are drawn differently on the MT4 charts.

Indices Fib Channels

Fibonacci 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.

Use these Fibonacci levels for channel plots: 0.618, 1.000, 1.618, 2.618, and 4.236. The first two channels see the most use, as pictured below.

Placing Fib Channels on MetaTrader 4 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.

Upper and lower lines help start trades and end them. They also set profit targets or stop points for stocks. See linear regression channels here:

Placing Linear Regression Lines on MT4 Platform

Equidistant Channel

The equidistant channel is the most often used channel in indices trading. On MT4 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 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 price in the upwards trend touched the upper channel.

Placing Equi-distant Channels on the MT4

Standard Deviation Channels

The Standard Deviation channel is a lot like the Linear Regression channel. It marks out the upper and lower boundaries where the stock price should stay. You can see the Standard Deviation channel below.

Placing Standard Deviations Channels in MT4 Platform

Study More Tutorials:

Trade Stock Indices

Placing Channels on Charts on the MT4 Trading Software

Indices Fib Channels

Linear Regression Channels

Equidistant Channel

Standard Deviation Channels