A forex session indicator breaks up the 24-hour trading day into visual segments, so you can see how the price acts while different markets—such as London, New York or Tokyo—are open.
The forex market is open 24 hours a day, and that has both positive and negative aspects. One of the negative aspects is that it may be hard to see what is happening just at the times you are trading, especially if looking back over prior days. For example, you may only trade for a 2-hour window during the London or US session. It might be nice to highlight this single period, every day, so you can more easily see it on the chart. Or you may be interested in testing out a strategy that only pertains to when the US market is active, or a strategy designed around the London open. A session indicator can mark off specific times on your chart, making it easier to go back and test strategies or see how something worked in the past.
Apply the Forex Session Indicator in the MT4 trading platform and it will highlight the times of day you wish to isolate or separate.
Download the Session Highlighter indicator and place it in your “Indicators” folder within your MT4 folder. The “Indicators” folder is usually within the “Experts” folder. Then launch your MT4 platform and add the indicator: From the drop-down “Insert” menu go to Indicators, then “Custom” and select Session Highlighter.
You will then be prompted to set your parameters. Currently the indicator goes back 50 days, and you can adjust this to longer or shorter. It is also setup to show one or two sessions, such as US session, or US and London sessions. If there is a time overlap between these two sessions, which have different colors, the overlap period combines the two colors to create a third distinct color.
Since each platform/broker may use a different time zone you will need to adjust the time so that the highlighted zones begin and end with the right session. To make sure you set all the times correctly, go to ForexMarketHours.com. Switch your MT4 chart to a one-minute chart, and look at the time of the most recent price bar. On the ForexMarketHour site, alter the time zone in the drop down box so that the time in the little green box matches the current time on your MT4 chart. Once that is done, the times in the graph reflect the major forex sessions based on your broker’s time zone, and these are the times to input into the indicator’s settings.
The chart below shows an example of how the indicator may be set up. This example shows a EUR/USD 15 minute chart with the London and New York sessions highlighted.
The indicator also marks the high and low for each session, only coloring in the area the price covered.
Download the forex session indicator for MT4: Download: Session Highlighter
Forex Session Indicator for MT4 Issues
When the time frame you choose involves crossing 0:00 (for instance you want to highlight 17:00 to 02:00) it creates a bit of an issue. Easiest fix is to just highlight one session for these pairs and leave the optional second session blank, or you may need to tinker a bit with the times to get something that works for you.
You’ll likely want to highlight your two chosen sessions with light colors. The colors you choose will create a new color if they overlap. For example, in the chart above, the London session is highlighted yellow and the US session in a bluish color. When they overlap—that is when both markets are open—they create the color green. May traders like this overlap period for trading, as it is frequently one of the most volatile times of the day.
Forex Session Indicator for MT4 Uses
This is a good tool for day traders. Volume picks up during the London and US sessions especially in a pair like the EURUSD or GBPUSD. Therefore, being aware of support of resistance levels that occur during these sessions is more important that support and resistance which occurs during low volume times. The same goes for the dominant sessions in any forex pair.
By highlighting the sessions you can quickly see where and when the action is occurring. It also makes it much easy to keep track of stats in a spreadsheet if you wish to track session relevant information.
This indicator serves little purpose for longer-term traders who focus on daily charts. Anyone who focuses on time frames shorter than the daily chart may benefit from having this.
For alternative indicators for MT4, near the bottom of the Terminal, click on Code Base. There you will find loads of indicators you can install with the click of a button. Sort by name then can scroll through. Right-click on an indicator and select Download. This will add it to your indicator list in MT4. From the Code Base you may find another indicator you like better.
By Cory Mitchell, CMT
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