Placing Channels on Commodities Trading Charts on the MT4 Software
The third option on the insert menu on the MT4 commodities trading software is the channels button. Channels button is used to insert various types of channels on Commodity Trading charts on the MT4 platform. The channels button is displayed below.
Menu Button For Placing Various Channel Tools on The MT4 Commodity Trading Software
The channels that can be placed on commodities charts are shown on the channels button menu are:
- Commodities Trading Fib Channels
- Linear Regression Channels
- Equidistant Channels
- Standard Deviation Channels
All these channels have different technical analysis & are drawn differently in the MT4 Commodities charts.
Commodities Trading Fib Channels
Fibonacci Channels is a type of channel that is automatically drawn by this Fibo Channels button key, To draw these Fib channels, a trader selects 2 points where to draw the same way a commodity trend line is drawn on the MT4 platform, once this commodity trend points are joined, the Fibonacci channels drawing tool uses these points to draw the first commodity 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 commodities trading 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 shown and illustrated below:
Placing Fibonacci Channels on MetaTrader 4 Commodity Trading 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 commodities trading price boundary, this commodities trading price boundary shows upper & lower commodities trading price boundary and the center point which is the mean for the commodities trading 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 commodities trades. Linear regression channels are shown below:
Placing Linear Regression Lines on MT4 Platform
Equidistant Channels
The equidistant channels is the most oftenly used channel in commodities trading. On MT4 commodities trading platform, a trader can draw an upward channel or downward channel, the commodity example illustrated and explained below shows an upward Commodity Trading channel, once the lower channel is drawn ( commodity trend line), the top channel is automatically drawn, a trader can then double click the upper channel to adjust it so that it touches the highest high of commodities trading price as shown below - the next time commodities trading price touches this line the buy commodity trade will then be closed and profit taken. As shown below this was the best commodities trading price to take profit when commodities trading price in the upward commodity trend touched the upper channel.
Placing Equidistant Channels on MT4 Platform
Standard Deviation Channels
Standard Deviations channel is similar to Linear Regression channel & it's also used to set the upper & lower boundaries within which commodities price should move along within. The Standard Deviation channel is displayed and shown below.
Placing Standard Deviation Channels on MT4 Platform
