Introduction to the Trading Sessions Open – Close Indicator
One key component in a trading strategy that many traders often disregard would be market timing. This pertains to the time of day or day of the week wherein trades are to be opened.
The Trading Sessions Open – Close indicator would be a useful tool for traders who would want to incorporate market timing in their trading strategies.
What is the Trading Sessions Open – Close Indicator?
The Trading Sessions Open – Close indicator is a custom technical indicator which gives traders information regarding what major markets are open at the time they are trading. This includes the three major trading sessions, which are the Asian Session, European Session, and the American Session.
How the Trading Sessions Open – Close Indicator Works?
The Trading Sessions Open – Close indicator retrieves the information regarding the broker’s server time. It also has an underlying preset time within its algorithm which would identify the Asian Session, European Session, and the American Session. This also includes time adjustments for changes due to the Daylight Saving Time whenever seasons change. The indicator then matches its preset time with the server time and marks the sessions with boxes. The boxes would span the open and close of each session, as well as the price range for the session.
The Asian Session is preset with color Misty Rose, the European Session with Lavender, and the American Session with Pale Green.
The color of the background of each session can be changed under the “Inputs” tab of the Trading Sessions Open – Close indicator settings.
How to use the Trading Sessions Open – Close Indicator for MT5
Different sessions have different characteristics. As such, traders should modify their strategy and approach when trading different market sessions. Certain currency pairs also tend to be more active on different trading sessions. Traders can opt to trade only the currencies that are active during that particular trading session. The Trading Sessions Open – Close indicator can help traders do this since traders could easily identify the markets that are open during the time that they are trading.
There are also certain strategies that would need market timing for it to work properly. One of which would be trading the breakouts during the London open.
Buy Trade Setup
When to Enter?
Observe an Asian Session that has a tight range. Mark the high and low of the Asian Session range. At the open of the European Session, open a buy order as soon as a bullish momentum candle closes above the high of the Asian Session range. Set the stop loss on the support below the entry candle.
When to Exit?
Trail the stop loss on each support level developed during the European Session until stopped out in profit.
Sell Trade Setup
When to Enter?
Observe an Asian Session that has a tight range. Mark the high and low of the Asian Session range. At the open of the European Session, open a sell order as soon as a bearish momentum candle closes below the low of the Asian Session range. Set the stop loss on the resistance above the entry candle.
When to Exit?
Trail the stop loss on each resistance level developed during the European Session until stopped out in profit.
Conclusion
The Trading Sessions Open – Close indicator is a very useful tool because it allows traders to modify their strategies according to the market they are trading in.
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