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What Are the Trading Hours

Trading hours refer to the specific window of time during which traders are allowed to open and hold positions on a funded or evaluation account. Nearly every prop firm enforces a set trading schedule, and positions must be closed, or "flat," before the allowed window ends. These restrictions are primarily in place to prevent traders from holding positions during periods of heightened risk, such as market closes, overnight sessions, or weekends.

How the Rule Works

The trading window typically begins at the daily market open and ends shortly after the close of regular trading hours. Most firms set the cut-off time sometime after 16:00 Eastern Standard Time, with trading allowed to resume at the next market open. Traders are expected to be flat, meaning all positions must be closed, before the cut-off time. Any positions that remain open after the trading window closes will be automatically liquidated by the platform.

When liquidation occurs due to trading hour violations, most firms do not treat it as a breach of account rules. The trade is closed where it stands, and the account remains active. Trading can resume once the allowed hours begin again. However, traders should not rely on automatic liquidation to manage their risk, as this may lead to poor fills or slippage that affects account performance.

Why Firms Restrict Trading Outside the Window

Holding positions through market closes, overnight sessions, or weekends introduces a level of risk that traders cannot control. During these periods, markets can gap up or down due to economic releases, geopolitical developments, or other external factors. Since there is no active order flow during these gaps, traders are unable to react or exit positions in real time, and this can result in losses that exceed typical intraday volatility.

To reduce exposure to such risks, firms enforce strict trading windows that keep all trading activity within sessions where liquidity and price continuity are more predictable. This approach protects both the trader and the firm from uncontrollable losses tied to holding trades during non-market hours.

Common Trading Window Example

While exact times may vary, a common schedule allows trading to occur between 18:00 or 18:30 Eastern the night before and 16:00 Eastern the following day. This aligns closely with the CME’s standard trading hours for futures contracts. Traders must ensure they are fully flat by 16:00 Eastern or whatever the firm’s designated cut-off is. Positions opened too close to the deadline may not have enough time to be managed properly, and traders should plan exits well in advance to avoid liquidation.

Summary

Trading hours define when traders are permitted to hold positions on their accounts. Firms require all positions to be closed before the daily cut-off, usually shortly after 16:00 Eastern. Any positions left open beyond this time will be automatically liquidated, though this typically does not count as a breach. The rule exists to prevent exposure to gaps and volatility that occur outside regular trading hours. Traders should stay aware of their firm's specific trading schedule and ensure all positions are managed in time to stay compliant.