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