Time Zone Indicator
The Time Zone Indicator displays the trading sessions, their time and the current session the market is at.
Description
The Forex markets are open 24 hours every day except Saturday and Sunday. However, the market has different sessions that open in different time zones. These time zones are Asian, European and North American sessions. It has been observed that the Forex market behaves in relation to a specific time zone.
Moreover, it is not advisable to place any orders in all time zones. Some trading sessions, such as the London sessions, are more liquid and volatile. Other sessions, such as the Sydney session, are small. Therefore, every trader should keep an eye on every forex time zone and this can be achieved with the time zone indicator.
Foundation
The time zone indicator displays the trading sessions, their times and the current session the market is in. This indicator shows trading sessions in New York, London, Sydney and Tokyo.
This indicator displays the current trading session in red on the chart as shown in the chart below.
Based on the EURUSD H4 chart above, the market is currently in the trading session in Sydney. This is indicated by the time zone indicator in red. As soon as the Sydney session ends, the indicator will update the chart to the next session.
This indicator is very useful because traders can know when an important trading session starts in order to open positions. Traders can also know when a particular session ends with this indicator in order to close their trades. So with this indicator, forex traders can know when to enter and exit the market.
How to use the time zone indicator
To use the time zone indicator for MT5 effectively, traders need to know the characteristics of each trading session.
The first session to open is the Asian session. The Asian sessions include the Tokyo and Sydney sessions. These sessions account for approximately 20% of all forex transactions.
Liquidity can sometimes be quite low due to low trading volumes. Due to this low liquidity, most currency pairs will trade in a range. During the Asian sessions, economic news comes out from Australia, New Zealand and Japan. There are stronger movements in pairs containing JPY, AUD and NZD.
The second session is the London session. The London session is the largest of all sessions. More than 32% of all transactions go through the London session. The London session is known for its high liquidity due to high trading volume.
The session has the lowest spread. Volatility slows down a little in the middle of the London period to the New York session. The market trend can change from time to time right before the end of the session, and London traders decide to take their profits.
The last session is a session in New York. This session is the second largest session after the London session. The New York session accounts for approximately 19% of all transactions in the Forex market.
This session is known for its great market movement potential. In fact, 85% of all transactions are in the US dollar. A session has high liquidity when it overlaps the London session. It is in this overlap that the forex market experiences the most trading volume.
With this explanation, the best time to trade using this indicator is when the London and New York sessions overlap. This is due to the fact that during this period the forex market is the most liquid and volatile.
The higher liquidity and volatility in this overlap is a result of the London (largest session with the largest traders) overlapping with the New York (second largest session).
This time the market makers are really stepping into the trade. Hence, this is the best time for professional traders to place their buy and sell orders.
Conclusion
The Time Zone Indicator for MT5 helps traders learn about the trading sessions in the market and make important decisions.