Placing Channels on Charts on the MT4 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 MT4 software platform. The channels button is cited below.
Menu Button for Placing Various Channel Tools in MT4 Platform Software
The channels that can be placed on the charts are pictured on the channels button menu are:
- Gold Fib Channels
- Linear Regression Channels
- Equidistant Channels
- Standard Deviation Channels
All these channels have different technical analysis and are drawn differently on the MT4 charts.
Gold Fib Channels
Fib Channels is a type of channel that's automatically drawn by this Fibo Channels button key, To draw these Fibo channels, a trader selects 2 points where to draw the same way a xauusd trend-line is drawn on the MT4 software, once this trend points are joined, the Fibo channels drawing tool uses these points to draw the first 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 price reaches these points.
Fib levels used to plot these channels are: 0.618, 1.000, 1.618, 2.618, 4.236: The most commonly used channels are first two channels as illustrated below:
Placing Fib Channels in MT4 Charts
Linear Regression Channels
The Linear regression indicator channels are self-adjusting channels, which adjusts as the channel is plotted from point 1 to point 2, linear regression channels then form what's similar to a price boundary, this trading price boundary shows upper and lower price boundary & the center point which is the mean for the price.
These upper & lower channels are used to open trades & close trades and also determine the levels to take profits or set stops for trades. Linear regression channels are illustrated below:
Placing Linear Regression Lines in MT4
Equidistant Channels
The equidistant channels is the most oftenly used channel in gold trading. On MT4 platform, a trader can draw an upwards channel or downward channel, the example illustrated and explained below displays an upward channel, once the lower channel is drawn ( trend-line), the top channel is automatically plotted, a trader can then doubleclick the upper channel to adjust it so that it touches the highest high of price as cited below - the next time price touches this line the buy trade will then be closed & profit taken. As cited below this was the best price to take profit when price in the up-ward trend touched the upper channel.
Placing Equidistant Channels on 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 price should move along within. The Standard Deviation channel is highlighted and shown below.
Placing Standard Deviations Channels in MT4
