Placing Channels on XAUUSD Charts on the MT4 Platform

The third option on the insert menu on the MT4 software is the channels button. The channels button is used to insert various types of channels on Gold charts on the MT4 platform. The channels button is shown below.

Menu Button for Placing Various Channel Tools on the MT4 Platform

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

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

All these channels have different technical analysis and are drawn differently on the MetaTrader 4 Gold charts.

Fibonacci Channels

Fibonacci Channels is a type of channel that is automatically drawn by this Fibonacci Channels button, To draw these Fibonacci channels, a Gold trader selects two points where to draw the same way a gold trend line is drawn on the MetaTrader 4 platform, once this gold trend points are joined, the Fibonacci channels drawing tool uses these points to draw the first gold 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 xauusd price reaches these points.

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

Placing Fibonacci Channels on MT4 Gold 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 gold price boundary, this xauusd price boundary shows upper and lower xauusd price boundary and the center point which is the mean for the gold price.

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

Placing Linear Regression Lines on MT4

Equidistant Channels

The equidistant channels is the most commonly used channel in gold trading. On the MT4 platform, a gold trader can draw an upward channel or downward channel, the xauusd trading example illustrated and explained below shows an upward XAUUSD channel, once the lower channel is drawn ( gold trend line), the top channel is automatically drawn, a Gold trader can then double click the upper channel to adjust it so that it touches the highest high of xauusd price as shown below - the next time xauusd price touches this line the buy gold trade will then be closed and profit taken. As shown below this was the best xauusd price to take profit when xauusd price in the upward gold trend touched the upper channel.

Placing Equidistant Channels on MT4

Standard Deviation Channels

Standard Deviation channel is similar to Linear Regression channel and it is also used to set the upper and lower boundaries within which xauusd price should move within. The Standard Deviation channel is shown below.

Placing Standard Deviation Channels on MT4