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What is the Best Time to Buy & Sell Stocks?

Steve Miley trader
Updated 5 Feb 2024

Whether you are day trading or swing trading, defining the right time to enter and exit the market can be the difference between profit and loss.  Trading can be broken up into days, hours, minutes, and seconds. The small edges, even when timing an entry, can make all the difference.


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The Best Time to Buy & Sell Stocks

So, is there any best time to buy stocks? Or even the best day of the week to sell them? Can there even be a best month or day when to buy stocks? Let’s study how time trading decisions can yield instant profits and lasting returns.

  • Trade during the opening and closing hours for the best returns.
  • The Monday effect and the January effect offer key insights for seasonal traders
  • Holding shares for the right time is as important as buying or selling stocks
  • September is the best month to buy shares, given the October boom

The Best Time of the Day for Buying and Selling Stocks

Market volumes plus prices go to extremes first thing in the morning.

  • Opening hours are a window when the market factors in all fresh releases since the previous closing time, contributing to volatility.
  • The closing hour is also a volatile period as traders re-adjust their positions. 
  • Skilled traders can recognise certain patterns and make quick profits during this period.
  • But less skilled traders could suffer immeasurably. For beginning traders, trading when volatility is high or at the start of the opening hour should be avoided.
ftse 100 best time of day to trade stocks
Source: IG.com

For experienced traders, the first quarter of an hour post the opening bell is the best time to trade. It is the period when the most profitable trades of a day on initial trends, are up for grabs. As you can see in the hourly chart above, FTSE 100 volume tends to spike at 8 am, when the market opens, and at 4 pm, ahead of the close. Therefore, the best time to day trade is generally during the first hour of trading.

This is because the biggest trades take place in the least period of time. In other words, there is more volatility and liquidity, as you can see. Learning when to trade also depends on the assets and exchange timings. Another factor that needs to be taken into account is the spread between the bid and ask, which is high in the first minute after the market opens due to the volatility.

The Best Time of the Week to Buy and Sell Stocks

Defining the best time of the week to buy and sell shares will depend on various factors. However, it’s important to remember that just because a certain day of the week may have been profitable in the past, it is no guarantee that buying or selling stocks on that day in the future will provide a return. 

Some people believe Monday is the best time of the week to buy or sell stocks. The theory is that, generally, the market will continue its trend from the previous session. 

However, how true that is is debatable, as many traders will go along with the theory that markets will move lower on Monday as traders digest the upcoming data and adjust their positions for the week. Now, this may be a good thing for traders holding a position for the week, as it may provide an opportunity to enter at a good price. The key is to build up a solid amount of data to ascertain if it is statistically viable.

Another day of the week that is considered a good day to buy and sell stocks is Friday, as market participants adjust their positions at the end of the week. While the theory may work, traders and investors should always evaluate the larger market context and the stock(s) they are trading. For example, if you went short a stock on a Friday, and after the close, a Fed speaker said they believe a rate cut is incoming, stocks may jump at the open on Monday, pushing your position into the negative.

Best Month to Buy and Sell Stocks: Market Cycles and Seasonal Trends

Market cycles and seasonality centres around anticipating how markets will behave at a specific time during the year. For example, if traders know December or January are stronger trading months, they can buy shares in November and lock in the position for the ensuing months.

A real world example of this is what is called the “Santa Rally.” This refers to the historical tendency for stock markets to rise leading up to Christmas and into the last few days of the year. 

Another example of seasonality is the notion that September is traditionally the month of downward movements in equities, while in October, it is assumed that the average returns are positive. This isn’t always the case, however, as there were record drops in October during the American Depression and the 1987 crash.

While market cycles are seasonality and important, it is vital to remember that these are general assumptions and not absolutes. As a result, if you want to profit from these trends, you will need to do your research to ascertain how best to execute a position during these periods.

Steve has 29 years of financial market experience including 3 years at Credit Suisse and 15 years at Merril Lynch. Steve is the Academic Dean for The London School of Wealth Management and has won many awards from Technical Analyst Magazine.