How to Trade During the Thanksgiving Weekend

Did you know that a whopping 197 million people shopped during the five days from Thanksgiving through Cyber Monday in 2024? The data from the US National Retail Federation also showed that the average spend wasn’t low, at $235 per person. 

What Makes Thanksgiving Week Different?

During this week, US retail sales tend to hit record highs. The euphoria in the season is neither limited to US consumer spend, nor to the retail sector. Here’s a look at the figures for 2024 Cyber Week (which includes Black Friday, the Thanksgiving weekend and Cyber Monday):

• US digital sales grew 7% year-on-year to $76 billion, while globally the number reached $314.9 billion. 
• The strongest shopping day for US and globally was Black Friday, with online sales reaching $17.5 billion and $74.4 billion, respectively. 
• GenAI and agentic AI played a key role, influencing $60 billion worth of global online sales through product recommendations, personalised offers and conversational customer support.
• Around 19% of the sales were generated through social media platforms, like Instagram.

It’s not just the retail sector that is impacted. Ecommerce majors, manufacturers of smartphones and other electronics, platforms earning through paid ad campaigns, CRM companies, payment gateways, credit providers (like BNPL), delivery, and many more sectors benefit from the shopping spree. 

How Does Thanksgiving Week Impact the Financial Markets?

The hype around Black Friday tends to create positive sentiment mainly for US stock indices and the US dollar. The S&P500 and Dow Jones stock indices offer exposure to a wider array of companies, while the Nasdaq 100 is in focus particularly on Cyber Monday. 

A word of caution: Before you get excited and start going long, it’s important to remember that trading volumes tend to contract during the Thanksgiving weekend. This is because US markets are closed to Thanksgiving and open only for a short time on Friday. 

Busting a common myth: Many traders believe they cannot trade US assets during the Thanksgiving weekend. This is not true. You can trade the USD as the forex market is open 24/7. You can also get exposure to US stock indices with CFD trading. 

What to Expect During Thanksgiving Week in 2025?

While sales growth during the Thanksgiving week was significant in 2023 and 2024, experts believe growth may remain tepid this year. Bain & Company estimates US retail sales to grow by 4% year-on-year in November and December. The report also indicates that 10% more consumers plan to shop on Black Friday and Cyber Monday in 2025 than they did last year. 

Factors impacting consumer spend in 2025: Fears of inflation triggered by President Donald Trump’s tariff announcements could weigh on consumer spend this year. The US National Retail Federation estimates these tariffs to lower US consumer spending power by up to $78 billion.

Trading the Thanksgiving Holiday

Here are a few things to keep in mind when trading the volatility during the Cyber Week:

• Markets tend to demonstrate the strongest intra-week move from Monday to Wednesday in the Thanksgiving week.
• Use support and resistance levels to make trading decisions. Consider using the MACD or Fibonacci indicators to determine these key levels.
• If you decide to hold onto orders through the weekend, don’t forget to consider overnight fees. It’s also a good idea to place partial profit targets, so that your risk reduces if markets continue to move in your favour. You may also use trailing stop loss, as this helps you be prepared in case markets go in the opposite direction to what you had expected.
• You may choose to trade on one of the days, rather than through the Cyber Week, to reduce your exposure to market volatility. Remember to use a combination of technical indicators (like Bollinger Bands and RSI) to determine the trend and volume dynamics before opening a position.
• Remember to always use a volume indicator, as this will tell you when liquidity is low and there are high chances of a false signal. You may use:
  • Volume moving average (VMA) – This indicator assumes that all trading days are equal and smoothens out volume data over a specific period to help identify normal and abnormally high/low trading activity. The VMA shows an average price that is being constantly updated. 
  • On-balance volume (OBV) – This is an indicator of momentum. It calculates the momentum by adding volume on up days and subtracting it on down days.

What to Watch: While you’re focusing on the Thanksgiving weekend, don’t miss economic data releases. The day before Thanksgiving, the US will report its core Personal Consumption Expenditures (PCE) price index, which is the Fed’s preferred inflation gauge. Also watch data on Durable Goods Orders, GDP Growth Rate for Q3, Personal Income and Personal Spending. Any weakness in these figures could dampen market sentiment.

Managing Risk During the Thanksgiving Week

While Thanksgiving and the holiday season are all about positivity, staying cautious is necessary. Here are a few things to keep in mind:

• Trade with Discipline: Festive cheer may tell you otherwise but trust your trading plan. 
• Size Your Positions Carefully: Since trading volume is low, larger orders can take longer to fil and result in more slippage. Try conservative sizing with a comfortable risk-reward ratio. 
• Practise on a Demo Account: Check strategies on a demo account and determine which setup works the best for you. This helps you enter the live markets with more confidence. 
• Stop Loss and Take Profit: Don’t forget to set these up with every position you open. 

To Sum Up

• US retail sales grew significantly during the Thanksgiving week in 2024.
• Thanksgiving impacts more than retail stocks.
• Trading volumes remain low during the Thanksgiving week.
• Sales growth in 2025 could be weaker than in the previous couple of years. 
• Follow good risk management practices as markets can be volatile during the Cyber Week.

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