By: Katie Gomez 

Every year, traders face the same dilemma: keep trading through the holidays or step away? They either force trades in dead markets where blown stops, random gaps, and preventable losses await, or they sit out the entire holiday season and miss the few legitimate high-probability setups that do appear. The cost of guessing wrong is real capital, and the difference between profitable traders and struggling ones often comes down to knowing which days deserve your attention and which are traps disguised as opportunity. This guide gives you the exact holiday trading hours for December and early January, reveals volume patterns, identifies which days historically produce tradeable setups versus “dead money” days, and provides a day-by-day calendar to know when to show up ready to trade and when to step away. By the end, you’ll be free to let go of FOMO and enact a clear plan that preserves your capital while positioning you for the rare opportunities actually worth taking.

The 2025 Holiday Trading Calendar: Know Before You Trade

Here’s your day-by-day breakdown for the holidays:

Christmas Week:

• Monday, December 22: offers regular hours (9:30 am-4:00 pm ET) and represents the last full trading day before Christmas with genuine liquidity.
• Tuesday, December 23: technically has regular hours, but volume starts declining significantly as traders check out early.
• Wednesday, December 24: (Christmas Eve) closes early at 1:00 pm ET with the bond market shutting at 2:00 pm.
• Thursday, December 25: (Christmas Day)—markets closed.
• Friday, December 26: returns to regular hours but becomes a historically low-volume “zombie day” where price action means nothing.

New Year’s Week:

• Monday, December 29 & Tuesday, December 30: maintain regular hours; volume remains light; minor year-end positioning on the 30th.
• Wednesday, December 31: (New Year’s Eve): closes early at 1:00 pm ET.
• Thursday, January 1, 2026: (New Year’s Day)—markets closed.
• Friday, January 2: Real trading resumes as institutional money returns.

Why these hours matter: early close days compress all activity into fewer hours, concentrating volume in the first 30-60 minutes before it dies completely, and the final hour before early closes can produce random moves as positions get squared. The critical pattern to understand: markets that are technically open don’t necessarily mean they’re actually tradeable.

Volume Patterns: When Liquidity Disappears

Understanding the liquidity cliff is critical to survival during holiday trading. On a typical trading day, SPY alone trades 4-6 billion shares. Christmas Eve? Volume drops 60-70%. The day after Christmas? 70-80%. The dead zone from December 23-27 sees institutional traders completely gone, leaving markets to retail traders making smaller emotional orders, algorithms running on autopilot with no human oversight, and a handful of hedge funds actively trying to manipulate thin order books. During this time, bid-ask spreads widen dramatically, small orders move prices unnaturally, stops get triggered by random noise rather than real selling pressure, and breakouts fail because there’s no follow-through volume to sustain them. The iron rule: if you see volume below 50% of average, you’re not trading with any edge—you’re gambling against algorithms in a rigged game you can’t win.

Best Days vs. Dead Money Days: The Breakdown

• Monday, December 22, is considered the best day to trade, as it is the last full day before Christmas and your final chance for year-end positioning and window-dressing plays. Volume runs normal to slightly below average, making it liquid enough for clean entries and exits. Look for fund managers buying leaders and tax-loss selling reaching exhaustion. Scanner strategy: new highs with volume and oversold bounces with confirmation. Risk level is moderate—still tradeable.

• Friday, January 2, will also be a good day for traders, as it marks the first trading day of the new year, when fresh capital from bonuses and 401(k) contributions floods in alongside new-year optimism. Volume returns to 70-80% of normal and improves throughout the day. Traders can use scanning to identify tax-loss rebound candidates with reversal patterns. The risk level remains moderate as liquidity improves, but it’s not perfect yet.

• Monday, January 6 (and beyond) is when institutions fully return, real money flows resume, volume normalizes, and your regular trading strategies apply again.

Dead Money Dates (AVOID):

• December 23: sees volume drop noticeably as traders check out early, creating choppy and unreliable price action where risk far exceeds reward—skip it.
• December 24- Christmas Eve: brings the lowest volume of the year with markets closing at 1 pm, most action compressed into the first hour, and random gaps and whipsaws everywhere—stay away unless holding a specific overnight position.
• December 25 – Christmas: markets closed; spend time with family, not charts.
• December 26: technically open but practically dead, a “zombie trading day” with no real participants—avoid entirely.
• December 27-31: Circle December 23-31 on your calendar in red and write “DO NOT TRADE” across it. This week becomes a dead zone where volume remains 50-70% below normal, price action becomes meaningless noise, year-end book squaring creates random moves, and false breakouts and breakdowns appear everywhere. Even December 31’s early close at 1 pm isn’t worth your time.

Your Holiday Trading Checklist (Check it Twice)

• Trade These Days: December 22, January 2, Jan 6+
• Avoid Completely: Dec 23-31
• Early Close Days: December 24 (1 pm ET), December 31 (1 pm ET)
• Volume Rule: Skip trading if volume is under 50% of the average
• Best Setups: Window-dressing plays (December 22), tax-loss rebounds (January 2)

The difference between professional traders and amateurs becomes crystal clear during the holidays: pros protect capital by sitting out dead markets, while amateurs blow up accounts chasing mirages in illiquid conditions. Your edge doesn’t come from trading every day—it comes from trading the right days. Mark December 23-31 as off-limits, show up ready on December 22, return refreshed on January 2, and commit fully when institutions come back January 6. The market will still be here in January, but if you force trades during the dead zone, your capital might not be. This isn’t about missing out—it’s about surviving to trade another year. The best trade you can make during the holidays is often no trade at all. Shape your holiday trading strategy using Trade Ideas today to start 2026 with your account intact and your mind sharp, while others are digging out of holiday losses they never should have taken on.