The Standard Deviation Channel forex MT4 indicator is an overlay indicator which draws standard deviation lines above and below the linear regression line.
All lines together from a channel that can be very useful for forex traders.
The slope of the channel is the most important thing to take a look at.
When the lines are sloping up, there’s an upward trend. Look for buy signals.
On the contrary, when the lines are sloping down, there’s an downward trend. Look for sell signals.
The standard deviation lines above the linear regression (middle line) represent resistance.
The standard deviation lines below the linear regression (middle line) represent support.
The GBP/USD M5 chart below displays the Standard Deviation Channel forex indicator in action.
Basic Trading Signals
Trading the Standard Deviation Channel indicator goes as follows:
Buy Trade: Open buy order near the lower trend lines when the channel is sloping up (bullish trend)
Sell Trade: Open sell order near the upper trend line when the channel is sloping down (bearish trend)
Exit Trade: For long trades, close near the upper resistance trend line. For short trades, close near the lower support trend line, or use your own preferred exit method
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart pattern indicator
Customization options: Variable (StarBar, Bars for Calculation, Inner Channel Multiplier, Outer Channel Multiplier) Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Copy and paste the StandardDeviationChannel.mq4 indicator into the MQL4 indicators folder of the Metatrader 4 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL4 > Indicators (paste here)