Setting Channels in Charts in the MT4 Software Platform
The third option on insert menu on MetaTrader 4 platform is the channels button key. The channels button is used to insert various types of channels on charts on MT4 software. The channels button is displayed below.
Menu Button for Placing Various Channel Tools on the MetaTrader 4 Platform Software
The channels that can be set on the charts are shown & displayed on the channels button key menu are:
- XAUUSD Fibo Channels
- Linear Regression Channels
- Equidistant Channels
- Standard Deviation Channels
All these channels have different trading analysis & are drawn differently on the MT4 charts.
XAUUSD Fibo Channels
Fibo Channels is a type of channel that's mechanically/automatically drawn by this Fib Channels button, To draw these Fib channels, a gold trader chooses/selects two points where to draw the same way a trend-line is drawn on the MetaTrader 4 software, once this trend areas are joined, the Fib 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 and booking levels to book profits once the price gets-to these areas.
Fib areas used to draw these channels are: 0.618, 1.000, 1.618, 2.618, 4.236: Most frequent used channels are the first two channels such as shown & portrayed below:
Placing Fibonacci Channels in MT4 Charts
Linear Regression Channels
The Linear regression indicator channels are self adjusting channels, which adjusts as the channel is drawn from point 1 to point 2, linear regression channels then form what is similar to a gold price boundary, this gold price boundary shows upper & lower gold price boundary & the center point which is the mean for the price.
These upper and lower channels are used to open trade positions and close trades and also determine the levels to tp orders or set stop losses for trade positions. Linear regression channels are shown below:
Placing Linear Regression Lines in the MT4
Equi-distant Channel
The equidistant channels is the most frequent used channel in xauusd. On the MetaTrader 4 software, a xauusd/gold trader can draw an upwards channel or downward channel, the example shown below shows an upward channel, once the lower channel is drawn ( trend line), the top channel is mechanically plotted, a trader can then doubleclick the upper channel to adjust it so that it touches the highest high of gold price as is displayed below - the next time gold price touches/tests this line the buy trade will then be closed and profit taken. As displayed below this was the best trading price to take profit when price in the up-ward trend touched the upper channel.
Placing Equidistant Channels on MT4 Platform Software
Standard Deviation Channels
Standard Deviation channel is similar to Linear Regression channel & it is also used to set the upper and lower boundaries within which gold price should move along within. The Standard Deviation channel is highlighted and illustrated and shown below.
Placing Standard Deviation Channels in the MT4
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