How Many Trading Days in a Year?

Whatever your position in the stock market, you probably know it is not open every day of the week, so you may not be able to trade every day throughout the year. So you're probably wondering what the number of trading days in a year is. Do you want to know how many trading days in a year?

A typical year in the US stock market has 252 trading days, with the number of trading days varying from year to year. Not every year consists of around 252 trading days. In 2020, there will be a maximum of 253 trading days, while in 2021, there will be about 252.

The number of trading days is not sufficient to inform how often you trade, so in this post, we'll discuss why trading days vary, who sets trading schedules, and other factors that may influence your trading frequency. However, let's first define what a trading day is.

How does a trading day work?

Exchange is open for business on any trading day for a particular stock market. Monday through Friday, the market generally opens unless there is a significant holiday or another event that prevents it from opening. 

Unlike electronic or extended trading hours (ETH), regular trading hours occur every trading day.

From 9:30 am to 4:30 pm, Nasdaq Exchange and NYSE are open for regular trading. 

A trading day begins when the opening bell rings and finishes when the closing bell rings. The closing bell marks the end of all share trading and freezes it in time until the next market day begins.

There are times when, even though it's a weekday, the market may not open. For example, the market doesn't open during public holidays or set aside for state functions, such as state funerals or state holidays. 

The market could also close earlier based on other exceptional circumstances, like a snowstorm or a hurricane, rather than the usual 4:00 pm closing time.

Trading when the markets open

Many traders rely only on trading the stock market during the first one or two hours open. Most opportunities (and risks) are available during the first hour. Professional traders understand that there is usually a lot of "dumb money" flowing at that time.

Dumber money refers to transactions based on what people read or watch the night before. 

It is typically old news that these people act upon. When they trade, prices can move sharply in one direction. Traders then use the overly high or low price as an opportunity to push it the other way.

The new day traders are often advised not to trade during the first 15 minutes. But for seasoned day traders, this is often the best time to trade. This is because the first trend of the day can lead to the day's biggest trades during that period.

How many total trading days are there in a year in the US market?

What is the number of stock trading days in a year? It takes an average of 252 days a year to complete a year's worth of trading, which amounts to an average of 21 trading days a month and 63 trading days a quarter. 

Trading days will vary from one year to another. But the number will never be the constant one. For example, in 2019, the trading days were 252 of 365 days. But in the 2020 year, this number was increased to 253. 

In 2021, the number of trading days will be 252 without showing any new circumstances. But this number might somehow change upon the arrival of the latest events and the state functions.

Stock exchanges are generally closed on the 104 weekends of Saturdays and Sundays and the nine market holidays. For calculating the trading days, you can use the formula of:

365 total days — 104 days — 9 days = 252 days

Who decides the course of the trading schedule?

The leading stock exchange in each country sets the trading schedule for the stock market. Many other trade exchanges follow the overall schedule of the NYSE for days and hours of trading within the United States. 

The NYSE used to schedule two-hour trading days on Saturdays and Mondays through Fridays before 1952.

However, the US exchanges such as the NYSE have maintained a Monday through Friday schedule since 1952, which runs from 9:30 am until 4 pm ET.

New York time zones determine these trading hours, so traders from other time zones must trade during the NYSE's trading day schedule. In addition, these exchanges allow remote trading via electronic trading platforms during market hours, but only during these hours. 

Anyone outside the Eastern Time Zone can access the NYSE during those hours because it is oprational between 9.30 am and 4.00 pm ET. If you live in California, the market opens at 6:30 am and closes at 1:00 pm.

Using historical data to calculate the number of trading days

Use daily historical data of an index or security you have traded daily during your reference period. You can determine how many trading days your market has per year quickly.

As long as that index is calculated every trading day, it would be the best candidate. However, if you are interested in options, starting with the S&P500 or DJIA is excellent.

Additionally, these indices provide a wide range of historical data (directly from the exchange or Yahoo Finance, for example).

After the data is fully collected, you need to multiply the total by the number of years to find the total number of days for each period. 

Make sure you know the hours of the stock market on which you plan to trade so you can make sure to trade at the best time.

What common mistakes should you avoid?

1. Make sure your data is complete.

2. Verify that all entries are unique. Technical errors may have been made (two copies of the same week's data), or some notes may have inserted some rows. Please clean the data before use.

3. To calculate the first and last year, ensure you include all data between the first day of the year (usually the 2nd, 3rd, or 4th) and the very end of the year (end of December). Don't use last year's data, as it is probably incomplete and will skew downward results.

4. Calculate the total number of days by using Excel's count function. Unfortunately, the first date is then subtracted from the last date, which will defeat the purpose of the calculation. Hence the number included will add each calendar day, not just each trading day.

5. When dividing the days by years, subtract the last year from the first year. 

Primary reasons behind the differences in trading days from one year to the next

We said earlier that trading days vary a little every year. Several years ago, it was 252 days, but it might also be 253 days or 251 days, depending on various factors. In a year, dealing times can vary depending on several factors, including:

1. During the holiday season

2. During the weekend

3. Important events

4. The leap year

How do holidays differ from other times of the year?

When banks are closed and holidays occur, markets are usually slower, and spreads are higher because volatility is lower. 

Even though trading is prohibited, you can still do so if you choose other currencies that do not correlate with the closed country.

When I place a market order after hours, what happens?

An after-hours market order may be possible with your brokerage (assuming someone is willing to sell). However, after-hours markets affect liquidity and price action due to the limited trading volume.

Some brokerage firms may require traders to place limit orders to control these unexpected price movements during after-hours trading.

In what way do the weekends differ?

Retail traders are prohibited from operating on weekends. However, it shouldn't bother you since this gives you time to reflect on what you did in the previous week. In addition, the weekend is a great time to trade cryptos with some brokers.

The only time I did this was when Bitcoin was making its fantastic bull run, so I looked for a correction, jumped in, and rode the wave. Not difficult at all! Since I don't trade cryptos very much, I'm sure I'll pick up again once I've perfected my strategy.

Occasionally there are significant gaps in the market when it comes to the market opening on Sunday, as there is still access to the currency market by banks and related organizations. 

If you are holding a trade, this can be a good thing when it moves further in your direction, but it can also be a negative if it moves in the opposite direction. 

Another strategy that can be used is to trade the weekend gap. You might find this strategy interesting because it is pretty popular.

Is it possible to trade at the end of the day?

Traders also tend to trade in the last hour of the day, between 3 and 4 pm EST. Trading at that time has been taking an extended break since the morning session, allowing traders to refocus. 

When analyzing common intraday stock market patterns, the last hour can bear many similarities to the first. Significant moves take place, and sharp reversals may occur. 

In the last hour of trading, amateur traders often buy or sell based on what has already happened that day. This morning, dumb money has floated around again, although not to the same degree as it did previously. 

A more experienced money manager or day trader will pick it up soon. Trades may be particularly active in the final minutes of trading, with big moves on high volume.

Choosing the best months and days to trade stocks

Beyond the hourly grind, consider the bigger picture too. For example, the market usually drops on Monday afternoons, especially around the middle of the month, so the afternoon is usually a great time to buy. 

Many experts recommend selling on Friday before that Monday dip occurs, especially if it's the first Friday of the month or if it comes before a three-day weekend.

Additionally, prices tend to decrease in September before rising again a month later. Value and small-cap stocks often increase in January, especially in October, generally positive.

What makes October so volatile?

October's increased volatility is often attributed to the 1929 and 1987 stock market crashes, which both happened in October.

There has also been uncertainty surrounding the midterm elections in November and the presidential election during the leap year. When volatility spikes, August, September, and November will drop once the year closes in December.

Yet the share price often rises in January because traders are more optimistic about the new year or have more fresh capital available. Additionally, the market usually rallies before the three-day holidays.

Tips to follow

• Discipline and focus are like muscles in day trading. Exercise them too much, and they will fail you. On the other hand, you can stay on your game if you trade two to three hours each day, and you won't get mentally tired. 

• You may become fatigued and more prone to mistakes if you try to trade six or seven hours a day.

• Individuals have varying levels of discipline and focus. The fact is that some traders can trade all day and do well, but most do better when they can trade within the few hours that are best for day trading.

• There are many rules and risks involved in day trading, and it is not suitable for everyone. So before you start the day trading, make sure you have a clear understanding of what it fully entails and if it is right for you.

• Use stops and don't risk too much money on one trade. It helps you reduce your losses because you can select a price at which your positions will be squared off, but you must maintain a safe distance from your entry price when using stop-losses. You are liable to get stopped out for a loss if you place them too close to each other.

• Traders must endure losses. The ability to deal with losing separates a successful trader from a failure. No matter how we feel about losses, they are a natural part of trading. 

• Market volatility is always a possibility, so be ready to exit positions when the market is not moving in your favor. This will minimize losses.

Unfortunately, most humans lack patience for money, especially when trading consistently. Double your account every week is a risky endeavor, and attempting this feat exponentially increases your risk. 

Trading sustainably takes time and effort. You cannot become a great trader overnight.

Related questions - FAQs

Are the forex markets open every day?

It is only open Sunday at 5 pm EST until Friday at 4 pm EST. However, you may trade 24 hours a day between those time frames. Because of this, banks need access to currencies globally, and with that, retail traders also have access to currencies.

Can forex be traded seven days a week?

It is impossible to trade forex seven days per week; it is available five days per week. Whether you trade full-time or part-time, that gives retail traders plenty of time to execute their trades. Review those outstanding setups if you have the time.

Over the weekend, can you trade?

The forex market is not entirely closed to retail traders, but we cannot trade. For retail trade, it is always closed, but it is always open for banks and other related organizations, so there is a weekend gap. The market is not always available at the same price when it closes at a specific price.

When do the stock markets open in Pacific Time?

West Coast Americans can view the stock market from 6:30 am to 1 pm PST.

When are the Japanese stock markets open?

The Tokyo Stock Exchange operates from 9 am until 3 pm local time, including lunch at 11:30. Tokyo's time zone is ahead of the United States, so that's 7 pm to 1 am (of the previous day) EST.

Bottom line

The trading days were all about that! Imagine taking at least 115 days off each year when you trade 250+ days a year. But, of course, most traders take much more breaks than that.

Stocks can be bought and sold during certain hours, so making the most of those opportunities makes sense rather than risking losing money at other times.

With the release of the NFP or Non-Farm Payroll report in the first week of the month, the market can be unpredictable. Because of this, most traders take all of those days off along with major holidays. You could make huge money by trading the news NFP, but it is hazardous and can backfire just as fast.

If you save 1% a day, you can become a millionaire in a few years. However, being patient and getting rich will take longer than getting there fast and losing everything. Shortcuts do not always lead to success.