The Best Days to Trade Stocks
What are the best days to trade stocks?
The best days to trade stocks are Tuesdays, the first days of a month, the last days of a month, and the end of the year (4th quarter).
Becoming a proficient trader involves recognizing when it’s best to trade, making it crucial to identify the art of knowing when to take the front seat. Consequently, determining the most favorable days to trade stocks is just as crucial as any other aspect.
We must establish specific trading rules to conduct a backtest analysis of the best days to trade stocks. In this article, we perform three separate backtests: the first examines weekdays, the second the best days of the month, and the third backtest evaluates the trading performance throughout the year by looking at calendar days.
In the backtests, we use S&P 500 as a proxy for the stock market. We use the cash index and backtest from 1960 until today.
What are the best days to trade stocks? Weekdays
We start by looking at weekdays. Specifically, we look at the performance from the close of one trading day to the close of the next.
The performance for weekdays looks like this:
| Mondays | -0.04% |
| Tuesdays | 0.05% |
| Wednesdays | 0.07% |
| Thursdays | 0.03% |
| Fridays | 0.05% |
Historically Wednesdays and Fridays have been the best over the last 60 years.
If we look at the recent performance, from 1995, it looks slightly different:
| Mondays | 0.02% |
| Tuesdays | 0.08% |
| Wednesdays | 0.04% |
| Thursdays | 0.02% |
| Fridays | 0.03% |
Tuesdays are the best day to trade stocks! Because of the strong performance on Tuesdays, we developed a strategy called Turnaround Tuesday trading strategy. The linked article offers several specific trading rules for free.
What is not shown in the backtests is that all the gains have come from the close to the next open, and thus there’s no money to be made by being invested from the open to the close (intraday/day trading). We have covered this phenomenon in a separate article:
What are the best days to trade stocks? Trading days of the month
In the table below, we have backtested the performance of each calendar day of the month from 1960:
| Calendar day | Average profit % |
| 1 | 0.17 |
| 2 | 0.13 |
| 3 | 0.05 |
| 4 | 0.03 |
| 5 | 0.1 |
| 6 | 0.06 |
| 7 | -0.03 |
| 8 | 0.03 |
| 9 | -0.07 |
| 10 | 0.05 |
| 11 | 0.01 |
| 12 | 0.05 |
| 13 | 0.04 |
| 14 | 0.03 |
| 15 | 0.05 |
| 16 | 0.13 |
| 17 | 0.05 |
| 18 | 0.04 |
| 19 | -0.14 |
| 20 | -0.04 |
| 21 | 0.01 |
| 22 | -0.05 |
| 23 | -0.03 |
| 24 | -0.01 |
| 25 | 0.01 |
| 26 | 0.08 |
| 27 | -0.02 |
| 28 | 0.09 |
| 29 | 0.07 |
| 30 | 0.03 |
| 31 | 0.09 |
Clearly, we can see that the best days to trade stocks are clustered around the first and last days of the month. We have developed this seasonality into a potential trading strategy:
Do the best days to trade stocks change depending on the backtest period? Let’s look at the data from 1995: