Choose "Chat" from the "Add an activity or resource" menu.
Give your chat room a name.
Write a brief description (maybe what you wish the students to use the chat room for, some general guidelines/rules).
Display description on coursepage - If enabled, the description above will be displayed on the coursepage just below the link to the activity or resource.
If you want students to be made aware of times that you will be in the chat room, choose a session time.
Repeat/publish session times - Choose whether a session time will be published in the coursecalendar, and how often you are repeating this session time.
NOTE - the chat room remains open at all times even outside of the published session times. If you don't want students to use the chat room outside of the published session times, please use the eye to hide the chat room from students.
Save past sessions - this determines how long Moodle keeps a record/transcript of chat sessions.
Everyone can view past sessions - If set to No, only users have mod/chat:readlog capability are able to see the chat logs (teachers, non-editing teachers). If set to Yes, students can also view past chat sessions.