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The Standard Deviation Channel Indicator is a technical tool among MetaTrader 4 indicators that automatically draws standard deviation channels based on price movements on the chart.
These channels consist of Midline, Inner Lines, and Outer Lines, which act as support and resistance levels and indicate bullish and bearish market conditions.
Indicator Specifications Table
The table below summarizes the specifications of the Standard Deviation Channel Indicator:
| Category | Trading Tools - Levels - Support and Resistance |
| Platform | MetaTrader 4 |
| Skill Level | Beginner |
| Indicator Type | Continuation - Reversal |
| Time Frame | Multi-Timeframe |
| Trading Style | Day Trading |
| Market Type | Forex - Cryptocurrency - Stocks |
Bullish Trend with the Indicator
In the EUR/USD chart, the Standard Deviation Channel draws a bullish channel. A buy position can be considered when the price moves upward from the lower channel line and crosses the midline.
Set the take profit near the upper channel line and the stop loss below the lower line.
Bearish Trend with the Indicator
The price crosses the upper channel line and moves downward in the bearish channel drawn for the GBP/NZD pair.
After crossing the midline and confirming with short-term candle formations, traders can enter a sell position and set the stop loss above the upper channel line.
Standard Deviation Indicator Settings
The indicator settings, shown in the image below Indicators:
- Start Bar: The starting bar
- Total Bars: Total number of bars or candles
- F1: First standard deviation coefficient
- F2: Second standard deviation coefficient
Conclusion
These five Standard Deviation Channel Indicator lines work together to form the channel structure.
Traders use this MetaTrader 4 trading tool to identify market trends, overbought and oversold zones, and price reversal points.
Combining these lines with other indicators and technical analysis patterns can help create a more effective trading strategy.
What is the Standard Deviation Channel Indicator?
It is a tool in MetaTrader 4 that draws channels based on price standard deviation and shows support and resistance levels.
What is the purpose of the inner and outer lines?
The inner lines are used for short-term support and resistance, while the outer lines are used for overbought and oversold zones.