Placing Channels on Charts on the MT4 Trading Software

The third option on the insert menu on the 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 MetaTrader 4 Platform

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

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

All these channels have different technical analysis & are drawn differently on the MT4 charts.

Stock Indices Trading Fibonacci Channels

Fibo Channels is a type of channel that's automatically drawn by this Fibo Channels button key, To draw these Fibo channels, one selects two points where to draw the same way a trend line is drawn on the MetaTrader 4 platform, once this trend points are joined, 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 taking levels to book profits once the stock price reaches these points.

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

Placing Fibonacci 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, the 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 trades & close trades and also determine the levels to take profits or set stops for stock trades. Linear regression channels are illustrated below:

Placing Linear Regression Lines in MetaTrader 4

Equidistant Channels

The equidistant channels is the most oftenly used channel in indices trading. On MT4 platform, one can draw an up-ward channel or downwards channel, the stock trading example explained and illustrated below shows an upward Indices channel, once the lower channel is plotted ( trend line), the top channel is automatically 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 MetaTrader 4

Standard Deviation Channels

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

Placing Standard Deviations Channels in MetaTrader 4