Placing Channels on Stock Charts in MT5 Platform
The third option on the insert menu on the MetaTrader 5 software is the channels button key. Channels button key is used to insert various types of channels on Stocks charts in MT5 platform. The channels button is shown below.
Menu Button For Placing Various Channel Tools on The MetaTrader 5 Stocks Platform
Channels which can be placed on the stock charts are shown on the channels button key menu are:
- Stock Trading Fibonacci Channels
- Linear Regression Channels
- Equidistant Channels
- Standard Deviation Channels
All these channels have different technical analysis & are drawn differently on the MT5 Stocks charts.
Stock 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 stocks trend line is drawn on the MT5 Platform, once this stocks trend points are joined, the Fibonacci channels drawing tool uses these points to draw the first stocks trend line & then automatically draws another 5 lines that form channels - these channels are used as profit taking levels to book profits once the stocks price reaches these points.
Fib levels 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 below:
Placing Fibonacci Channels on MT5 Stocks Charts
Linear Regression Channels
Linear regression channels are self-adjusting channels, that adjusts as channel is drawn from point 1 to point 2, the linear regression channels then form what's similar to a stocks price boundary, this stocks price boundary shows upper & lower stocks price boundary & the center point which is the mean for the stocks price.
These upper and lower channels are used to open stock trades & close stock trades and also determine the levels to take profits or set stops for stock trades. Linear regression channels are illustrated below:
Placing Linear Regression Lines on MetaTrader 5
Equidistant Channels
The equidistant channels is the most commonly used channel in stock trading. On MetaTrader 5 platform, a trader can draw an upward channel or downward channel, the stocks example illustrated and explained below shows an upward Stock channel, once the lower channel is drawn ( stocks 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 stocks price as shown below - the next time stocks price touches this line the buy stocks trade will then be closed and profit taken. As shown below this was the best stocks price to take profit when price in the upward trend touched the upper channel.
Placing Equidistant Channels on MetaTrader 5
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 stocks price should move within. The Standard Deviation channel is displayed and shown below.
Placing Standard Deviation Channels on MetaTrader 5
