Placing Channels on Charts on the MetaTrader 5 Software
The third option on insert menu on MT5 software is the channels button. Channels button is used to insert various types of channels on charts on the MetaTrader 5 software. The channels button is illustrated below.
Menu Button for Placing Various Channel Tools on the MT5 Software
The channels that can be placed on charts are shown on the channels button menu are:
- Forex Fibonacci Channels
- Linear Regression Channels
- Equidistant Channels
- Standard Deviation Channels
All these channels have different analysis & are plotted differently on the MT5 charts.
FX Fibo Channels
Fibonacci Channels is a type of channel that is automatically drawn by this Fibo Channels button key, To draw these Fibonacci channels, a trader chooses two points where to draw the same way a forex trend line is drawn on the MT5 Software, once this trend levels are connected, the Fib channels drawing tool uses these points to draw the first trend line and then automatically draws another five lines which form channels - these channels are then used as profit taking levels to take profits once the price gets-to these levels.
Fibonacci 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 Fibonacci Channels in MetaTrader 5 Charts
Linear Regression Channels
Linear regression channels are self-adjusting channels, that adjusts as channel is drawn from point 1 to point 2, the linear regression channels then form what's similar to a price boundary, this price boundary shows upper & lower price boundary and the center point which is the mean for the 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 trades. Linear regression channels are shown below:
Placing Linear Regression Lines on MT5
Equidistant Channel
The equi-distant channel is the most often used channel in Forex trading. On MT5 platform, a trader can draw an upwards channel or downward channel, the example below shows an upward channel, once the lower channel is drawn (forex 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 shown below - the next time price touches this line the buy trade will then be closed and profit taken. As shown below this was the best price to take profit when the price in the upwards trend touched the upper channel.
Placing Equidistant Channels on MT5
Standard Deviation Channels
Standard Deviations channel is similar to Linear Regression channel & it's also used to set the upper & lower boundaries within which price should move within. The Standard Deviation channel is portrayed and shown below.
Placing Standard Deviation Channels in MetaTrader 5 Online Software
