Time Zone Difference in Forex

When trading in the Forex market, it is very important to understand the time zones correctly and to be able to calculate the difference between your time zone, the time zone of your trading server, and the time zone 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, it often happens so that many traders simply don't understand how time zones work and how to calculate the differences.

The first in educating yourself on the topic would be 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 the server's time zone and some specific time zone (e.g., UTC or EST) or between the server's time zone and yours. When it isn't stated anywhere, usually, it can be easily understood from the context — the latter (difference between the 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 is 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 the difference. Of course, you will 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 the UTC. For example, if your MetaTrader platform shows that the last H1 candle was formed at 10:xx and the UTC time is 11:xx, then the time zone of your server is UTC-1. Unfortunately, MetaTrader (neither MT4 nor MT5) doesn't allow retrieving the server's time zone for the indicators, scripts, or EAs automatically.

Your own time zone should be known to you. If you know its name but don't know how much it is relative to the UTC, then just google it or look it up in Wikipedia. If you want to know the difference 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 UTC-1, your own time zone is PST (Pacific Standard Time, which is UTC-8), and you also want your EA to trade at EST (Eastern Standard Time, which is UTC-5). So, the difference between the server's time and the specific time zone's time (EST) will be: -1 - (-5) = -1 + 5 = 4. The difference between the server's time and yours: -1 - (-8) = -1 + 8 = 7.

If you want to share your thoughts on calculating the time zone difference properly in Forex, please feel free to ask on our forum.


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