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Time Zone Difference in Forex

December 6, 2010 by

When trading in the Forex market it’s very important to understand the time zones correctly and to be able to calculate the difference between your time zone and the timezone of your trading server and the timezone of the specific trading session. Some MetaTrader expert advisors (that are created to trade during a certain time or a trading session) require trader to set an input parameter for the time zone difference. Unfortunately, I see that many traders simply don’t understand how time zones work and how to calculate the differences.

First, I recommend reading the Wikipedia article on time zones. Second, when you need to set an input parameter for the time zone difference, you need to know which difference is that — either between server’s time zone and some specific time zone (e.g. GMT or EST) or between server’s time zone and yours. When it’s not stated anywhere, usually, it can be easily understood from the context — the latter (difference between server’s and your time zones) is used quite rarely, only when some data should be aligned with your own local time (for example, when you want the pivot points for your local trading session). The difference between your server’s zone and some specific time zone is a more popular requirement — it’s used in the EAs that were programmed to position trades at some specific time.

Now, you have to find out the time zone values of the zones involved in your differences. Of course, you’ll need to find your server’s time. In MetaTrader that’s quite easy — just switch to an hourly timeframe and check the time of the last candle and compare it with GMT. For example, if your MetaTrader platform shows that the last H1 candle was formed at 10:xx and GMT is 11:xx then the time zone of your server is GMT-1. Unfortunately, MetaTrader (neither MT4 nor MT5) doesn’t allow retrieving the server’s time zone for the inductors, scripts or EAs automatically.

Your own time zone should be known to you. If you know its name but don’t know how much is it relative to GMT, then just google it or look it up in Wikipedia you’ll see. If you want to know that for some specific time zone (which is different from yours) you can follow the same procedure.

OK, you know all the necessary time zone values, now you have to set up the differences — so, how do you do it? For example, your server’s time zone is GMT-1, your own time zone is PST (Pacific Standard Time, which is GMT-8) and you also want your EA to trade at EST (Eastern Standard Time, which is GMT-5). So, the difference between server’s time and the specific time zone’s time (EST) will be -1 — (-5) = -1 + 5 = 4. The difference between server’s time and yours: -1 — (-8) = -1 + 8 = 7.

Do you have problems with time zones and their differences?

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If you want to share your thoughts on calculating the timezone difference properly in Forex, please, feel free to reply using the form below.

3 Responses to “Time Zone Difference in Forex”

  1. TradeProfits

    Funny I was just talking to some guys about this topic, this morning. I have spent far too much time learning this stuff. Initially it seems so simple, but often I need to go all the way back to basics, and think of where the sun is rising, in order for it to make sense. Well I have the hang of it now, but this sure did take more mindwork than I expected once I started out..

    Reply

  2. Kevin

    Can you provide a more concrete and easy to understand example on this? Basically, its kinda confusing. Thanks.

    Reply

    admin Reply:

    Sure. For example you want to try my AUD/JPY Wednesday 15:00 Expert Advisor. It trades on Wednesday exactly at 3 p.m. (EST or Eastern Standard Time). But the chances that your broker’s MetaTrader server is also located in EST time zone are rather slim. For example, it’s located in London, which is in GMT time zone. The above-mentioned EA has an input parameter that helps it understand in what time zone its operating – Server_EST_Difference. You have to set to the difference between your MetaTrader server’s time zone and EST time zone. EST is the same as GMT-5, while GMT is the same as GMT+0. Then Server_EST_Difference should be set to 0 – -5 = 0 + 5 = 5.

    Please, let me know if you still don’t understand it.

    Reply

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