How Many Trading Days in a Year?

One of the ways that brokers advertise the potential of the Forex market is that they say the market is open 24 hours a day, 5 days a week, year round.

But how true is that statement? How many actual trading days are there in a year?

The US markets are open for about 252 days each year. This number fluctuates by a couple of days from one year to the next. 2020 had 253 trading days, but 2021 had 252.

Why do the number of trading days fluctuate?

The number of trading days in a year fluctuates for a number of factors.

There are 52 weeks every year, so it goes to follow that there should be 104 weekend days. However, if New Year’s Day happens to fall on a Saturday or Sunday, there will be more weekend days during that year.

Major holidays

The US stock market observes 9 holidays in a calendar year:

  • New Year’s Day: January 1st
  • Martin Luther King Jr. Day: Third Monday of January
  • Presidents’ Day: Third Monday of February
  • Good Friday: Friday before Easter Sunday
  • Memorial Day: The last Monday of May
  • Independence Day: July 4th
  • Labor Day: First Monday of September
  • Thanksgiving Day: Fourth Thursday of November
  • Christmas Day: December 25th

Aside from these 9 holidays, major events may result in the market staying closed for a day

For example, the markets closed following the September 11, 2001 terrorist attacks. They also closed for a day when former President George H.W. Bush passed away.

The London and Asian markets also have their own holidays:

  • New Year’s Day
  • Good Friday
  • Easter Monday
  • Early May Bank Holiday (1 day)
  • Spring Bank Holiday (1 day)
  • Summer Bank Holiday (1 day)
  • Christmas Eve
  • Boxing Day (December 26)

The UK stock market was also closed for Queen Elizabeth’s Platinum Jubilee celebrations in 2022.

What does this mean for the Forex market?

Interestingly enough, if you were to pull up a Forex chart on any one of the days above, you may see that price is still moving.

That’s because Forex has no official “trading floors.” So while stocks on major exchanges will not trade during bank holidays, there’s still foreign exchange going on, so you’ll often see that prices still fluctuate.

So instead of complete closure of the markets and being unable to place any orders, you’ll see that price movement and volume are very minimal these days.

eur usd on queens jubilee
June 3 2022 was a bank holiday in the UK but there was still good movement on the EUR/USD during the London session

It also depends on your broker

Whether you’re able to place any trades or not will also depend on your broker. Some brokers do accept orders during certain bank holidays, while other brokers may not.

Additionally, since the crypto market moves on weekends and weekdays, some brokers will actually let you trade crypto during the weekends, too.

What is a trading day?

For most stock markets, the trading day starts at between 9:00 to 9:30 AM and ends at 4 PM to 5 PM.

The New York Stock Exchange opens at 9:30 AM and closes at 4:00 PM.

During times when the stock exchanges are open, you can expect that there will be a lot more trading volume in the Forex market than times when the exchanges are closed.

This is simply because so many more banks and institutions are active during these hours and placing trades.

In Forex, there’s no set “trading day” as it is a 24 hour market.

So as soon as the New York session closes at 5 PM eastern time, the Asian session starts. The Asian session overlaps with the first few hours of the London session, and the London session overlaps with the first half of the New York session.

As you can imagine, trading volume is the highest during the London/New York overlap.

Should you trade every single trading day?

Even though there are 252 trading days every year, give or take a few, that still begs the question: should you even trade every single day?

While you certainly can trade every single day, you may end up not doing so. It depends a lot on your personal commitments and your trading style.

Day trading

If you’re a day trader, you will probably sit at the charts every single day and look for potential entries. You may take 1-3 or even more trades every single day.

Since you’re capitalizing on the smaller intraday swings, you’ll want to maximize your exposure to the charts and try to take advantage of every day the market is open.

Swing trading

Swing traders are often in positions for many days, so once you enter a trade, you may not wish to go back to the charts until your trade fully plays out.

As a swing trader, you may only trade a few times a month.

Taking a break from the charts

Contrary to popular wisdom, trading is one of the few professions where not going to work can actually help you make money.

Every time you place a trade, you’re exposing yourself to risk. This means that every trade you take is a potential loss, and the probability of you losing money is higher than the probability of you making money!

This becomes especially true if you get emotional after a losing streak. Losing streaks can mess with the psychology of even the best traders, and revenge trading is the fastest way to kiss a trading account goodbye.

When in a losing streak, one of the best things to do is to take a break from the charts, clear your head, and go back to the charts once you have your focus again.

Remember, trading is a long-term play. It’s highly doubtful that you’ll double your account with a single trade. While that is possible on rare occasions with a bit of luck, most days, you should be happy with smaller successful trades.

Conclusion

The Forex market is touted as one of the most active markets in the world, and with good reason.

There are a few days where the market is closed, and even then, there are times that you should take a break from the charts to stay sane!