We Talk Finance
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We Talk Finance

Trading Day? What is it? How does it work?

The title must be mesmerizing you, but the main topic is, Do you know what really trading day is?

Yes, it is true that traders have days for trading. From Wikipedia, we found that In business, the trading day or regular trading hours (RTH) is the time span that a particular stock exchange is open as opposed to electronic or extended trading hours (ETH).

Then there might be always a question that spins to our minds that —

How many trading days in a year?

From the report, we found that the NYSE and NASDAQ average about 253 trading days a year. This is from 365.25 (days on average per year) *5/7 (proportion workdays per week) — 6 (weekday holidays) — 3*5/7 (fixed date holidays) = 252.75 ≈ 253.

So, what are the holidays? It’s merely the national holidays are most of the holidays like New Year’s Day, Martin Luther King Jr. Day, Washington’s Birthday, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Chrismas Day.

Previous Trading Days

We research a lot and we found some fantastic information about the previous trading calendar. In 2016, there were precisely 252 trading days. In that year, August had the most (23) and January had the lowest (19). With this information, the average number of days per month was 21.

Also, if we comprising the older data, it’s similar to 2018, 2019, 2021. But in a rare case scenario, 2017 had 251 and 2020 had 253 days.

Now, let’s talk about Trading day time zones

Every Individual stock exchange has its own opening hour based on specific time zones. For those trading in different parts of the world, there are unique trading days based on the hours associated with any given time zone. For example, NASDAQ is open 9:30–16:00 ET, and anyone outside of the Eastern Time Zone will have a different trading day.

But, what about the best day for trading?

Traders always predict trades by their strategies and skills. But there are some traders who still believe that the best day to buy a stock is Monday. And it’s amazing true that it’s the best for buying. Also, Friday is the selling in the week.

Here is a screenshot, where you can see the S&P 500 Average Change by Weekday: 2018

But, in forex trading platforms, there are other rules you have to follow. All in all, Tuesday, Wednesday and Thursday are the best days for Forex trading due to higher volatility. During the middle of the week, the currency market sees the most trading action. As for the rest of the week, Mondays are static, and Fridays can be unpredictable.

The Bottom Line

All I mean, your trading style, strategy, and skill matters how much you can profit? It doesn’t matter which is the best day and which is worst? Take them as a suggestion but your only and one target will be the professional in the trading career.

Best of luck!

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MD Tanjib

I am working for TopAsiaFx and acting as a Forex Author. I have 4+ years of good experience in Forex Trading.