One overlooked piece of the trader’s tool chest can immediately transform chaos into an organized, well-constructed environment, and it’s as simple as a trading calendar. Traders at Simpler Trading may focus on trending stocks, volume, and momentum – but traders who have financial goals for their portfolios should know how many stock days they have each year to achieve their target. Inclusive of that, traders should know how each day, week, and month affects a trading setup.
How Many Trading Days Are There In A Year?
Suppose traders have a goal of increasing a trading account size by a set percentage; establishing daily or weekly trading goals would be a good start. While there are 252 trading days in a 365-day year, there are unique cycles to the markets that every trader should be aware of throughout the year. A trader could establish a set goal for an increase each day. However, there are seasonal effects on the market, and there could be days when the best move is to do nothing.
How does a trader establish a trading strategy to counter the periodical nuances of the market on an annual basis? The stock market generally consists of short-lived trends, broad chops, or trending runs with tight ranges. As traders consider these risk factors and learn when they are most likely to happen, trading can organize a trading schedule that factors in market volatility.
Knowing when the U.S. stock market opens and closes each day is essential for traders to know when to place trades and check positions. Orders submitted outside of regular stock market hours may not get filled until the market opens the following day.
The Nasdaq and the New York Stock Exchange (NYSE) are open for trading Monday through Friday from 9:30 a.m. to 4:00 p.m. Eastern Standard Time (EST). NYSE and NASDAQ officially start trading hours at 9:30 a.m. Eastern Time (EST). Depending on your trading firm, generally, traders can place orders to buy and sell stocks in the pre-market and after-hours markets.
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Video Guide to Trading Around the Holidays
Market Holidays Affect Trader Paydays
Traders have a love-hate relationship with market holidays. Aggressive traders may not look forward to non-trading days when they can’t make money, but Simpler Trading founder, John F. Carter, promotes taking time to enjoy friends and family and regroup mentally. John has said he sometimes gets his best ideas when he spends some time away from the markets. So, whether time away involves a trip to the lake or meditation, it’s essential to take time for self-care.
Traders can be sure that The U.S. stock market will be closed on Federal Holidays:
- New Year’s Day
- Martin Luther King Jr. Day
- President’s Day
- Good Friday
- Memorial Day
- Juneteenth National Independence Day
- Independence Day
- Labor Day
- Thanksgiving Day
- Christmas Day
A market holiday is any non-weekend day when the Nasdaq Stock Market or the New York Stock Exchange (NYSE) closes for the day. When a holiday like New Year’s or Christmas falls on a Saturday or Sunday, market closures are governed by two rules:
- When the holiday falls on a Saturday, the markets will close on the preceding Friday.
- When the holiday falls on a Sunday, the markets will close on the subsequent Monday.
On some holidays, or days close to them, the stock markets remain open, while the bond markets stay closed or close early. Both the NYSE and NASDAQ adhere to the federal government’s holiday schedule for closings, except for Veterans Day (open), Columbus Day (open), and Good Friday (closed).
The markets have traditionally closed for all or part of their session for the funeral of a U.S. president. The most recent observation was on December 5, 2018, after the passing of President George H.W. Bush.
The stock market can also remain shut for reasons other than holidays, such as severe technical issues with an exchange’s trading platform, terrorist attacks, or extreme weather emergencies. There are also shortened trading days on the NYSE calendar. For example, In 2022, the U.S. stock market will be closed at 1 p.m. EST for a partial holiday following Thanksgiving on November 25th.
Trading Seasons Marked by Volatility
While volatility also spikes in August, September, and November, October has the distinction of being recognized as the most volatile month to trade stocks. Historically the range of the closing highs and lows of October has been significant. This is measured by the CBOE Volatility Index (VIX), which measures the 30-day expected volatility of the US stock market.
Statistically, pre-holiday and post-holiday mood changes can affect equities. Stock markets gain on the day before a holiday, and trading volume can be ten times larger after a holiday. These noticeable market trends can often occur if the holiday involves a long weekend.
The price of stocks usually fares better in January as traders possibly feel more optimistic about the new year. Since holidays are typically happier times of the year – trading psychology perhaps – they can potentially reintroduce positivity and optimism after the holidays. Stocks also tend to rally before a three-day holiday, and this is a good reminder note to place in trading calendars.
Volatility Calendar
There are at least six recurring trading days in the U.S. stock markets where volatility is most likely higher; those days are mentioned below.
- The first day of the month
- The last day of the month
- Jobs Report on the first Friday of every month
- Earnings announcement days (each company announces a day quarterly)
- Option expiration Friday
- Federal Open Market Committee (FOMC) days when the Chairman of the Fed speaks to provide direction
Traders should note these days on their trading calendar as a reminder to monitor the VIX for market volatility.
Trading Days on Wall Street
It can be easy for traders to confuse the stock markets and the exchanges. Commonly referred to as Wall Street – a real street in New York City, where the New York Stock Exchange and other financial institutions are located. The New York Stock Exchange (NYSE) is the largest securities market globally. The NYSE hosts 70 of the world’s biggest corporations and 82 percent of the S&P 500. Traders buy or sell more than 9 million corporate stocks each day which can equal billions of dollars exchanged daily.
NASDAQ is an acronym for the National Association of Securities Dealers Automated Quotations, and it was founded by the National Association of Securities Dealers (NASD), headquartered in New York. The NASDAQ gave traders the first electronic exchange when it launched on February 8, 1971, making a physical trading floor obsolete. However, when traders talk about the NASDAQ, they are not always referring to the exchange itself, but to the NASDAQ Composite Index, a statistical measure of a part of the market.
The exchanges we refer to when discussing the trading calendar refer to the three major stock exchanges: the New York Stock Exchange (NYSE), the National Association of Securities Dealers Automated Quotation System (NASDAQ), and the American Stock Exchange (AMEX). The three major stock exchanges, NYSE, NASDAQ, and the American Stock Exchange (AMEX), synchronize opening times with the other stock exchanges.
After Hours Trading
Due to other constraints, not all traders find the standard NYSE trading hours a good fit. The U.S. stock exchanges, including the New York Stock Exchange (NYSE) and the NASDAQ Stock Market, are open to investors Monday through Friday from 9:30 a.m. to 4 p.m. EST.
- NASDAQ after-hours trading sessions are from 4 p.m. to 6 p.m. EST.
- NYSE after-hours trading sessions are from 4:00 p.m. to 8 p.m. EST.
- Pre-market trading hours are from 4 a.m. to 9:30 a.m. EST.
- The U.S. markets are closed on Saturday and Sunday.
- Regular U.S. stock market hours occur from 9:30 a.m. to 4 p.m. EST.
- Pre-market trading from 4 a.m. to 9:30 a.m. EST, and after-hours trading from 4 p.m. to 8 p.m.
Forex trading differs, as currency trading has unique hours of operation. The week begins at 5 p.m. EST on Sunday and runs until 5 p.m. EST on Friday. Not all hours of the day are equally suitable for Forex trading. The best time to trade currencies is when the market is most active. When more than one of the four markets are open simultaneously, there will be a heightened trading atmosphere.
Another opportunity for after-hours trading is the WeBull extended hours trading brokerage house – which simplifies pre-market and after-hours trading. Some traders work full-time and can’t trade during regular market hours. WeBull opens up trading before the market opens at 4 a.m. EST and after it closes until 8 p.m., in addition to regular trading hours.
Power hour trading, while occurring during the regular hours of the market, is when most traders execute frequent and large transactions. There are two power hours traders focus on; when the market opens and when the market is ending.
Some traders can’t trade full-time. A trader can limit trades to the hours when most volatility occurs by focusing on these two hours. This is when traders look to take profits, day trade the volatility in the last hour, or close their trades out for the day. It’s also the time traders enter into new swing trade positions.
This allows traders who work full-time jobs to use the evening hours to research stocks and place orders for trades after the market has closed. Traders who establish a calendar that considers the nuances and opportunities the market offers can develop a trading plan that works for them all year – rather than the other way around.
Holidays Make Mild Markets
Trading around holidays can mean the market has a different vibe than most other days. Traders need to remember that a few holidays sprinkled throughout the year are impactful to understand. These holidays affect the trading calendar, and it’s important to discuss how they impact the broader market and your trading strategies for entries and exits.
A few of the actions that traders should consider might happen as we approach or go past a holiday are:
- Trading volume tends to dry up, and the market lacks liquidity
- We may see little to no price action
- Should anticipate erratic price movement that makes no sense
- Low volume means you may have difficulty exiting a trade
Traders at Simpler Trading consider and prepare for the market response to more significant holidays, such as Christmas or Thanksgiving. It’s important to note that there is an entire season when people are starting to leave for vacation or are traveling to be with family during these holidays.
Traders and investors are generally uninterested in the markets when away from their computers or desks. The active traders essentially tone down their game a little bit. After all, when it’s a holiday, people want to be with family and do other things.
Volume Dries Up, Trades Flounder
We know that trading volume tends to dry up, which means there is a lack of liquidity in the market. It’s essential to understand why this happens for a few reasons. When traders come into the market the day before Christmas or the days between Christmas and New Year, they may be ready and excited to trade. However, they may notice there isn’t much activity in the market.
When the stock price isn’t moving, the reason can simply be that many people aren’t at their computers pushing buttons and affecting price action. The impact of that on your trades is something to consider.
If traders are making sizable trades or even trading options, they should be aware that there may not be a lot of liquidity to get into a trade or to get out. Getting in and out can be difficult without a large spread or a larger gap between the buy-sell and the bid-ask price. Traders will find it’s the same with options trading. Without much trading activity in the market, traders have a big effect as they execute or get out of a trade.
Trade strategies are difficult in a market with little-to-no price action because there aren’t many people trading. It takes a group of people to push the price because the bid-ask price is so broad. A large amount of money can push the price since nobody else is affecting it.
The market can resemble a leaf in the wind that could get pushed around very easily. Without many other traders in the market pushing and causing the price action to move around, it tends to be either erratic or flat.
Notable Trading Calendar Events
Low volume or liquidity is something traders also tend to see leading up to the Federal Open Market Committee (FOMC) announcements. When the Fed talks about raising interest rates, traders see the market go quiet – at least a couple of hours ahead of it and usually for the day of the FOMC meeting. Traders need to know ahead of time and prepare when the market holidays and announcements by the Central Bank are on the calendar.
What is a Half-day in the Market?
Traders should know what a half-day means for their trades. Essentially it means the market is open for half the day. If the trader isn’t careful, their trade could get trapped with an early market close for an official holiday.
How Holidays Affect the Bonds Market
The bond market holidays affect the stock market. Other holidays for other countries can affect their U.S. markets, too. Traders would do well to know the special holidays, dates, and market open and close times.
Options Over the Holidays
Finally, whether options traders are buying or selling, they should understand the Black-Shoals mathematical equation and theta burn. They should know how to apply the Greeks, and theta decay, when it comes to trading options over the holidays.
Seasonal Markets
There are a few common sayings that traders refer to regarding the market seasons. “Sell in May, go away” can be a relatable phrase for traders. More often than not, at some point in May, there is a period that the market usually sells off pretty hard.
This almost signals the beginning of summer for the market. Many traders, market leaders, and hedge funds are going out to their “Hamptons.” The kids are out of school, nice weather, and the beach is calling. They are not around the market to make an impact.
Traders can anticipate a quiet market as far as movement during the summer. That can make for some erratic price functioning. This doesn’t mean that retail traders leave the market. It means traders need to be careful; fewer people are trading and moving the market during the summer.
However, gearing towards the end of the year, traders encounter the Santa Rally. The Santa Rally is a run where the market sees a move upward. There is no guarantee of this, as traders saw no Santa Rally in the winter of 2018 when the Federal Reserve was tightening up rates. The Santa Claus Rally didn’t happen until the following year when the Fed reversed its interest rate hikes.
Going into Christmas, people want to make their numbers look good. The overall mood is that people are usually happy, uplifted, and want to have a good time going into the holidays. They typically don’t want to see their account smashed as they celebrate the holiday cheer. There also tends to be a bullish run before the Fourth of July. This historically pro-America sentiment affects the stock market too.
After Christmas and going into the new year, historically, leading up to and into the Fourth of July. The market tends to be bullish. Traders would do well to know there is some seasonality to some of these holidays – so pay attention to that and see how you can take advantage of it.
FAQs on Stock Trading Days
A: The first hour of a trading day and the last hour of the trading day are considered the most active as traders move in and out of positions. Also, Friday and Monday are considered the most active days of the week as investors, institutions, and retail traders get in or get out of positions.
A: After-hours trading is more volatile and riskier than trading during the regular hours of the exchanges. Trading volumes and liquidity may be lower than during regular hours. Potential buyers and sellers are matched by electronic communication networks (ECNs) rather than traditional markets. Due to after-hours volatility, the opening price for a stock on the following day may be different from the price at which it closed the previous day.
A: The two-hour-a-day trading plan offers day traders the ability to trade the market opening and closing volatility without triggering the Pattern Day Trader (PDT) trade count. So, yes, day traders with small accounts can open up more opportunities by taking advantage of after-hours volatility.
A: Earnings season happens after each quarter.
A: The Hindenburg Omen is a term used in stock trading where certain market conditions align to form a signal. For instance, it’s a warning that conditions are ripe for a steep market decline.
A: There are typically 252 trading days in a year for the US stock market. However, this number may vary depending on the exchange and country.
Updated 5/24/2022
