Top Strategies for Trading in a 24/7 Market

Twenty-four/seven trading markets enable investors to buy and sell assets at any time of day or night, providing access to global opportunities and advantageous price swings that are often unavailable during traditional market hours. 

However, greater access to opportunities doesn’t always mean greater gains. Successfully navigating 24/7 markets requires as much strategy for risk management as it does for picking winners. 

Understanding 24/7 Markets: Opportunities and Challenges

A 24/7 market is a financial market that is open for trading 24 hours a day, seven days a week, with no breaks for weekends or holidays. Perhaps the most recognizable of the 24/7 markets is the cryptocurrency market, where trades happen around the clock. Another notable market is forex, which trades 24/5. And some newer platforms allow round-the-clock trading of tokenized assets, which are digitized securities and other real-world assets that are traded on a blockchain. 

In traditional markets like the New York Stock Exchange (NYSE) and Nasdaq, trading only occurs during regular business hours and never on a weekend. However, that’s changing soon, too, as these exchanges strive to keep pace with global trading demands. The NYSE has announced plans to move to a 22/5 trading schedule later in 2025. Meanwhile, Nasdaq is scheduled to move to 24/5 trading in late 2026.

Benefits and Risks of 24/7 Trading

What makes a 24/7 market worth considering? Flexibility and global reach are two of the biggest benefits, as traders can respond to news or price changes in real-time. 

However, just because the 24/7 market doesn’t sleep, doesn’t mean that traders don’t need rest. In 24/7 markets, prices can swing sharply, especially when fewer people are trading, creating opportunistic volatility that allows traders to take advantage of price swings by buying low and selling high. 

Volatility also creates challenges for investors, as prices may react erratically during periods of low trading activity. 

Key Strategies for Trading in a 24/7 Market

There are several top strategies that investors can use not only to survive but thrive in 24/7 markets:

Technical Analysis  

Technical analysis is a strategy used by traders to determine when to enter or exit the market based on statistical trends in trading activity, such as price movement and volume. This type of analysis uses price charts, trade volumes, and trends to forecast how a stock will behave in the future based on past performance. 

Technical analysis is not concerned with the quality, strength, or earnings of the company. Instead of focusing on whether a company is good, it only considers whether it’s a good time to buy or sell.

In addition to using line charts and trendlines to predict stock outcomes, technical analysis also employs tools like candlestick charts to visualize the high, low, opening, and closing prices for each trading day. Analysts use candlestick, bar, and line charts to identify support and resistance levels, where support levels signal potential buying opportunities before prices bounce back up, and resistance levels signal potential selling points before the price stalls or falls.

Strategizing using technical analysis isn’t just about vibes; there are several mathematical equations that make buy and sell signals stronger. One example is the relative strength index (RSI), which produces a value between 0 and 100 to indicate whether a stock is overbought or oversold. Other indicators include moving averages to spot average prices and moving average convergence divergence (MACD) to help identify changes in momentum.

Fundamental Analysis  

In contrast to technical analysis, fundamental analysis is a long-term investment strategy that focuses on buying a stock while it is undervalued rather than trying to time the market or predict a stock’s behavior.

Fundamental analysts use a company’s financial statements to analyze their income statements, balance sheets, and cash flow, paying special attention to earnings per share (EPS), price-to-earnings (P/E) ratios, and revenue growth. These calculations help fundamental analysts ascertain if the business is growing and if it’s strong.

In addition to combing through financial statements for data, fundamental analysts also look at company leadership, industry trends, and market share. Combining financial data with a company’s qualitative strengths provides investors with insight into its intrinsic value.

The goal? To determine when a stock goes “on sale,” signaling an opportunity to buy. 

Risk Management

Risk management, designed to protect portfolios from significant loss, is an integral part of any trading strategy. If you compare investing to a football game, fundamental and technical analysis are the plays, and risk management is the pads. Risk management doesn’t actively move you closer to the goal, but it keeps you from a loss that could take you out.

Tools like position sizing and stop-loss orders enable traders to make informed decisions about how much to invest and when to cut their losses if the market moves in the wrong direction.

• Position sizing is a strategy that determines how much money an investor will allocate to a single trade. A common starting point is the 2% rule, where an investor risks no more than 2% of their capital on a single trade to insulate their portfolio from overwhelming loss.  
• Stop-loss orders are a trading strategy to prevent a portfolio from bottoming out. Investors use an order to close a position once the price falls to a certain level, thereby capping any loss. Stop-loss orders are crucial for 24/7 trading because they execute regardless of whether the investor is on their fifth energy drink and watching the stock price fall.  

Using a combination of position sizing and stop-loss orders prevents small losses from turning into big ones and protects capital during times of emotional and physical fatigue. In particularly volatile markets, like those that occur in 24/7 trading, managing risk is just as important as being right about the next best stock. 

Automation and Bots

One of the best trading strategies to implement in 24/7 trading is automation. Using automation to execute trades based on pre-programmed rules helps to keep trades about facts and opportunity rather than emotion or fatigue. 

To facilitate automatic trading, investors use trading bots connected to their brokerage accounts to execute trades based on price, volume, or technical indicators. These bots use algorithmic design and software to enable traders to establish trading rules that guide their buy and sell decisions. Trading bots are already available on many reputable platforms, but investors can also create their own bots for a more customized option.

Regardless of whether you choose a prebuilt or fully DIY bot, it’s critical to use a bot that supports backtesting. Backtesting is the coulda, woulda, shoulda of investment strategy. It allows traders to evaluate how their strategy would have performed using historical data, refining the logic of buy and sell decisions and reducing the risk of costly mistakes once the bot goes live. After investors vet and test the automated system, bots run trades on autopilot while the investor sleeps, works, or even binge-watches reality TV. 

Diversification and Portfolio Management

Diversification is a foundational aspect of any investment strategy. It can be broadly summed up by the phrase “don’t put all your eggs in one basket.” In diversification, investors hold a wide variety of investments, like stocks, bonds, cryptocurrencies, real estate, or government securities, with different characteristics to smooth out returns and reduce risk.

Successful diversification, a key concept in risk management, is closely tied to portfolio theory, a mathematically grounded strategy for combining asset classes to maximize returns and reduce risk. Portfolio theory allows investors to pan out and see the big picture of how different investments work together.

Diversification is not the secret ingredient in a get-rich-quick recipe, but it is a foundational strategy in protecting portfolios from market volatility, which is especially important in 24/7 trading.

Platforms and Tools for 24/7 Trading

Analysis paralysis is a real phenomenon, especially when traders attempt to make fact-based decisions rather than emotional ones, particularly when the market is open 24/7. 

Trading Platforms and Applications

Modern trading platforms offer traders a solution to overwhelm, streamlining the information necessary for decision-making and allowing for trade execution all in one package. 

Most trading platforms not only enable order execution through market, limit, and stop orders but also feature advanced charting tools to support technical analysis, including candlestick patterns, trendlines, RSI and MACD indicators, and up-to-the-second price movements. 

Additionally, many platforms now support API integrations that connect a brokerage account to the use of automated trading bots, algorithms, or third-party management software, which can monitor markets and execute trades for the trader while they do other things. 

Whether an investor clicks “buy” at 2 a.m. or a bot does it for them, modern platforms provide accessibility, speed, and flexibility across a range of asset classes. 

Sentiment Analysis Tools

What can’t technology do? Sentiment analysis tools help traders gauge the general market vibes by using natural language processing (NLP) to scan sources such as social media, news articles, and online forums. These sentiment analysis tools work by using NLP to scan text and assign a sentiment score based on how people are talking about assets, sectors, or the market. 

Using sentiment analysis tools lets traders predict potential price movements driven by factors like emotion, fear, or hype, which don’t always show up on charts and statements. Sentiment is an especially valuable indicator in speculative or volatile markets, where a single headline can cause a significant price swing. 

Emerging Trends in 24/7 Trading

As technology improves, artificial intelligence (AI) and machine learning (ML) are revolutionizing trading strategies by analyzing complex market patterns to generate investment opportunities. AI and ML can quickly collect and process vast amounts of data, including price movements, economic indicators, and sentiment, which would be extremely difficult or impossible to do manually. Additionally, ML models adapt and learn over time, so with every new market behavior, ML refines strategy and increases accuracy. 

As trading shifts away from traditional market hours and toward a 24/7 trading model, there are no plans for AI to clock out for robot retirement anytime soon. The round-the-clock trading model is gaining traction among institutional and mainstream investors, driven by the power of technology and automation.

Currently, cryptocurrency is the only asset that trades 24/7 due to its decentralized nature and global reach. However, the pressure for global access and instant execution is turning the tide toward more assets being available after market hours. Trading platforms like Charles Schwab allow after-hours and pre-market trading (excluding market orders), and the NYSE and Nasdaq are both pursuing extended hours in the near future.

With continued advancements in AI, ML, and mobile platforms, combined with the global demand for decentralized finance, the 24/7 trading space is expected to expand. 

The Bottom Line

Success in 24/7 trading markets demands not only skill but strategy and discipline. Investors using technical and fundamental analysis to guide entry and exit decisions are only completing part of the puzzle. 

Risk management tools, such as stop-loss orders, position sizing, and diversification, coupled with automation integrations, are equally important in sometimes thinly traded and volatile 24/7 markets. 

As technology improves and markets transition to extended trading hours, the most successful investors will be those who stick to their strategy and use tools to remain disciplined.