Placing Channels on CFDs Charts on the MetaTrader 4 Software

The third option on the insert menu on the MetaTrader 4 platform is the channels button key. Channels button key is used to insert various types of channels on CFD Trading charts in MetaTrader 4 platform. Channels button key is shown below.

Menu Button For Placing Various Channel Tools on The MT4 CFD Software

The channels that can be set on the charts are shown on the channels button key menu are:

1. CFDs Trading Fib Channels
2. Linear Regression Channels
3. Equidistant Channels
4. Standard Deviation Channels

All these channels have different analysis and are drawn differently on the MT4 charts.

CFDs Trading Fibonacci Channels

Fibo Channels is a type of channel that is automatically drawn by this Fibonacci Channels button, To draw these Fibonacci channels, a trader selects two points where to draw the same way a trend line is drawn on the MT4 platform, once this trend points are joined, the Fib channels drawing tool uses these points to draw the first cfd trend line & 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 areas 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 & shown below:

Placing Fibonacci Channels in MT4 Charts

Linear Regression Channels

Linear regression channels are self adjusting channels, which adjusts as the channel is plotted from point 1 to point 2, linear regression channels then form what is similar to a cfd price boundary, this cfds 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 & close trades and also determine the levels to take profits or set stops for cfds trades. Linear regression channels are illustrated below:

Placing Linear Regression Lines on MetaTrader 4 Software

Equidistant Channels

The equidistant channels is the most commonly used channel in cfd trading. On the MT4 cfds platform, one can draw an upward channel or down ward channel, the cfd example shown below shows an upward CFD Trading channel, once the lower channel is plotted ( trend line), the top channel is automatically plotted, one 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 cfd trade will then be closed & profit taken. As shown below this was the best price to take profit when price in the upward trend touched the upper channel.

Placing Equidistant Channels in MetaTrader 4 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 trading price should move along within. Standard Deviation channel is displayed & shown below.

Placing Standard Deviation Channels in MetaTrader 4 Software