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In business, a trading day or regular trading hours (RTH) is the period of time that an exchange is open, as opposed to electronic or extended trading hours (ETH). Trading days are generally Monday to Friday. At the end of a trading day, all transactions end and are frozen until the start of the next trading day.
The knowledge of trading days in a year allows investors and traders to plan strategies, plan transactions and make informed decisions. From the stock market to the futures market, including the forex and cryptocurrency markets, each segment operates on its own trading schedule.
The NYSE and NASDAQ stock exchanges average approximately 252 trading days per year. This corresponds to 365.25 (average days per year) * 5/7 (proportion of working days per week) – 6 (weekdays holidays) – 4*5/7 (fixed holidays) = 252.03 ≈ 252.
To calculate trading days, subtract weekends and holidays from the total number of days in a year, which is typically 365. In the period from 1990 to 2022, the average annual number of stock market trading days was always around 252.
However, there were slight fluctuations, taking into account the period from 1990 to 2021, the average was 252,875. It should be noted that while this number is generally stable at 252, it can fluctuate slightly.A closer look at the computer components reveals these nuances.
There are nine holidays that the New York Stock Exchange (NYSE) observes each year, and they are as follows:
● New Year’s Day (January 1st)
● Martin Luther King, Jr Day (The third Monday of January)
● Presidents’ Day (The third Monday in February)
● Good Friday (The Friday before Easter Sunday)
● Memorial Day (last Monday of May)
● Independence Day (July 4th)
● Labor Day (The first Monday in September)
● Thanksgiving Day (The fourth Thursday of November)
● Christmas Day (December 25th)
Some public holidays coincide with weekends (Saturdays and Sundays). Specific rules apply to market holidays in such cases. There are actually 2 rules:
● If the public holiday falls on a Saturday, the stock market is closed on the previous Friday.
● The markets remain closed on the following Monday, as a public holiday comes on a Sunday.
On or near certain holidays, stock markets remain open while bond markets remain closed or close early. The NYSE and NASDAQ will follow the federal government's holiday closure plan, except for Veterans Day (open), Columbus Day (open), and Good Friday (closed).
The number of trading days a trader uses can vary depending on his or her trading style. For example, day traders trade every day, unlike swing traders and position traders. Factors such as holidays, family events, illnesses or meetings can also make participating in trading difficult for traders of all styles.
Swing trading is a trading strategy that uses both fundamental and technical analysis to profit from large price movements and avoid periods of inactivity. Swing trading generally involves holding a long or short position for more than one trading session, but no longer than a few weeks or months. While swing trading gives investors the opportunity to profit from short-term price movements, it also carries the risk that if the market moves in the opposite direction to the investor’s position that they will lose potential returns.
Position trading is a trading strategy where traders hold their positions for long periods, usually weeks to months, to see and listen to trends to make a profit although position trading allows traders to exploit them over long periods of growth in the market, which can be more profitable than short-term.
Market Volatility-Trading Days
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Market volatility is known that some trading days, such as the first and last day of the month or the days before and after public holidays, are more volatile, which may affect trading success on these days.
Riskiest Time Frames For Trading-Hours
Even though a normal trading day lasts six and a half hours, they are not that volatile and risky. During the first and last hour of each trading day you will observe high trading volume and prices fluctuate up and down every second. In the morning, many people trade stocks that are in the news: earnings reports, major events, etc. In the last hour, volume and volatility have increased again as traders try to close remaining positions. For day traders, these are the two most important moments of the day. Outside the first and last hours the market is much more stable unless there is important news.
Riskiest Time Frames For Trading-Days
It is also worth noting that some trading days are riskier than others due to various factors.
● First and last days within each month.
● The first Friday of each month when the stock report is released
● The days when the results of the largest companies are published are announced every day by the Fed – or the Federal Open Market Committee (FOMC), as they are officially known.
Now that you know how to trade based on the day of the month or week you're in, it's time to look at how to trade on some "special" months.
Many believe this is because investors are returning to work after the holidays with a positive attitude and looking for new opportunities.
The September Effect:
September is considered a good month to sell by many traders for many reasons. First, this is the worst performing month for the three major US indices.Additionally, many individual traders close their positions to offset learning costs. Finally, a lot of what could happen in October.
October - The Month With The Highest Volatility:
There is no exact reason why October stands out, but some experts believe it is due to the stock market crashes of 1929 and 1987, which occurred this month. For this reason, many investors are afraid of this month. Historically, however, October was a positive month, even if the gains were rather limited.
Christmas Eve discount :
In the last days of the year, many traders are closing their positions. So now is a good time to buy stocks if you want to buy them at a discount and also take advantage of the big purchases in early January.
Trading Days in Years: 2023-2024-2025
The number of trading days for the next 3 years is approximately the same.
➔ There will be a total of 252 trading days in 2023.
➔ In 2024 the stock market calendar will have 251 days.
➔ In 2025, the total wide variety of days on which stocks may be traded is 250.
However, there may be exceptions for weekends or other special circumstances that may affect the number of trading days, such as unscheduled market closures due to natural disasters, terrorist attacks or other events.
Frequently Asked Questions:
➢ Are trading days business days?
Trading days are business days.Trading days mark the time when stock exchanges and other financial markets are open and stocks and commodities are actively traded for companies and investors.
➢ Define power hour when discussing the stock market?
The stock market hour refers to the first and last hours of the trading day, which are known for increased activity as traders actively enter or exit positions. This intensity is particularly visible on Fridays and Mondays, which are considered the most active days of the week and where investors, institutions and retailers strategically conduct trading activities.
Is it possible for day traders to execute trades outside of regular trading hours?
Yes, day traders can trade outside of business hours with the two-hour trading plan. This approach allows them to benefit from market open and close volatility without being subject to the Pattern Day Trader (PDT) rule. This flexibility in trading hours gives day traders with small account sizes the opportunity to explore additional opportunities and benefit from after-hours market movements.