Placing Channels on Forex Charts in MT5 Platform
The third option on the insert menu on the MT5 Forex trading software is the channels button. The channels button is used to insert various types of channels on Forex charts on the MT5 platform. The channels button is shown below.
Menu Button For Placing Various Channel Tools in MetaTrader 5
Channels which can be set on the forex charts are shown on the channels button menu are:
- FX Trading Fibonacci Channels
- Linear Regression Channels
- Equidistant Channels
- Standard Deviation Channels
All these channels have different technical analysis and are plotted differently on the MT5 Forex charts.
FX Trading Fibonacci Channels
Fibonacci Channels is a type of channel that's automatically drawn by this Fibo Channels button, To draw these Fib channels, a trader selects 2 points where to draw the same way a forex trend line is drawn on the MT5 Platform, once this forex trend points are joined, the Fibonacci channels drawing tool uses these points to draw the first forex 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 forex trading price reaches these points.
Fibonacci levels used to plot 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 5 Forex Charts
Linear Regression Channels
Linear regression channels are self adjusting channels, which adjusts as channel is plotted from point 1 to point 2, linear regression channels then form what is similar to a forex trading price boundary, this forex trading price boundary shows upper and lower forex trading price boundary & the center point which is the mean for the price.
These upper and lower channels are used to open forex trades and close forex trades and also determine the levels to take profits or set stops for forex trades. Linear regression channels are shown below:
Placing Linear Regression Lines in MT5
Equidistant Channels
The equidistant channels is the most oftenly used channel in Forex trading. On MT5 Forex platform, a trader can draw an upward channel or downward channel, the forex trading example below shows an upward Forex channel, once the lower channel is drawn (forex trend line), the top channel is automatically plotted, a trader can then double click the upper channel to adjust it so that it touches the highest high of forex trading price as shown below - the next time forex trading price touches this line the buy trade will then be closed and profit taken. As shown below this was the best forex trading price to take profit when price in the upward trend touched the upper channel.
Placing Equidistant Channels in MT5 Software
Standard Deviation Channels
Standard Deviations channel is similar to Linear Regression channel and it's also used to set the upper & lower boundaries within which forex price should move along within. The Standard Deviation channel is displayed and shown below.
Placing Standard Deviation Channels on MetaTrader 5 Online Platform
