# Placing Channels on Stock Index Charts on the MetaTrader 4 Stock Indices Platform

The third option on the insert menu on the MetaTrader 4 stock index trading software is the channels button. The channels button is used to insert various types of channels on Stock Indices Trading charts on the MetaTrader 4 stock index trading platform. The channels button is shown below.

Menu Button For Placing Various Channel Tools on The MetaTrader 4 Stock Indices Platform

The channels that can be placed on the stock index 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 MT4 Indices 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 Stock Indices trader selects two points where to draw the same way a stock indices trend line is drawn on the MT4 stock index platform, once this stock indices trend points are joined, the Fibonacci channels drawing tool uses these points to draw the first stock indices 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 stock index 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 MetaTrader 4 Stock Indices 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 stock indices price boundary, this stock index price boundary shows upper and lower stock index price boundary and the center point which is the mean for the stock index 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 stock index trades. Linear regression channels are shown below:

Placing Linear Regression Lines on MetaTrader 4

## Equidistant Channels

The equidistant channels is the most commonly used channel in stock index trading. On the MetaTrader 4 stock index trading platform, a stock indices trader can draw an upward channel or downward channel, the stock indices example illustrated below shows an upward Stock Indices Trading channel, once the lower channel is drawn ( stock indices trend line), the top channel is automatically drawn, a Stock Indices trader can then double click the upper channel to adjust it so that it touches the highest high of stock index price as shown below - the next time stock index price touches this line the buy stock indices trade will then be closed and profit taken. As shown below this was the best stock index price to take profit when stock index price in the upward stock indices 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 and lower boundaries within which stock index price should move within. The Standard Deviation channel is shown below.

Placing Standard Deviation Channels on MetaTrader 4