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 Per 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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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:
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.
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.
Once you understand your schedule and the markets schedule, why don’t you come and trade with us for free? Simpler Trading has opened the Simpler Free Trading Room where traders such as yourself can trade along side an experienced professional at no extra cost to you. So what are you waiting for, sign up today.
FAQs on Stock Trading Days
Q: What is power hour in the stock market?
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.
Q: How does the stock market move after hours?
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.
Q: Can day traders place trades after hours?
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.
Q: How often is earnings season?
A: Earnings season happens after each quarter.
Q: When was the last Hindenburg Omen?
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.