Can I trade at night?

Many traders, especially those just getting started trading, want to know if they can trade while still holding their day job. Some may be worried that this will put them at a disadvantage in the markets. It’s not just OK to have a day job while stating trading, it’s advised! The markets can be risky places, so having a day job with a steady source of income in very important. That being said, if you work regular hours, and want to trade in the evenings, there may be some obstacles you’ll have to work around. These vary by market, with some markets being objectively better than others for trading in the evening. Let’s take a look at some of those obstacles.

Stock Markets:

First, we will look at general markets, which encompasses mediums such as stock market exchanges. The two most common stock exchanges are the NASDAQ and the New York Stock Exchange. Historically, these exchanges had strict hours, and you would need to do any trading at a predetermined time.  However, in recent years, the advent of modern technology has allowed people to trade in numerous countries and exchanges virtually anywhere in the world. This has created more opportunities for trading at various times of the day, instead of just 9:30am-4pm EST. 

There are certain benefits to being able to trade at various times, such as being able to react on proprietary information right away, and pulling out more quickly if you see a downward trend in the market. However, the bulk of trading is still done during workday hours on the East Coast. If these hours don’t work for you, you can consider trading after-hours, on another exchange, or in a different market.

Futures Markets:

Unlike stock exchanges, futures markets are open almost 24 hours a day, only closing for a period of about 15 minutes. Although they are almost always open, there are some nuances to good trading practices. Most importantly, it’s usually best to buy assets during the workday hours of the country they are from. That means that, if you are buying a futures contract for an asset in Australia, it’s best to trade during the workday in Australia, which would be the evening in the US. Many US-based futures traders trade on Asian and Australian markets.

Trading in a foreign market always poses risks. In any new market, it is important to do research, develop a strategy, and trade cautiously until you gain experience and confidence. It is also important to remember that markets in different countries have different regulations and customs. This makes research extremely important.

Forex (Foreign Exchange) Markets

Similar to the futures market, the Forex markets are open 24 hours a day, all around the world. Forex is the largest and most liquid market in the world. This means that it’s relatively easy to find buyers or sellers for any currency pair and any time. However, similar to the futures market, it is recommended that you trade a currency pair during the workday hours of one of the currencies. This is because during the day, there are more traders and less volatility. Although volatility creates opportunities for traders, it also creates risk. Therefore, at least until you gain experience and confidence, it’s best to trade during less risky times of the day.

Summary

If you work a day job and want to trade at night on the side, go for it! While markets tend to be more predictable during the day, it is definitely possible to be an effective trader at night. Be sure that you know which market, country, and exchange you are dealing with, and do your best to trade the assets of that associated country during their day time. Do your research, especially on differences in regulations and practices if you’re trading on an overseas market. Don’t feel pressured to have to trade full time to make a profit. Especially with the help of technology and real-time news, trading at night can be a good path to success.