When I set up a Trader in bazaar and leave him overnight, I wake up in the morning to find my screen at the Login part, and there is a message that a "time out error' has occurred, thus my character cannot stay on for an extended period of time while i am afk.
Has anyone had this problem and how do I stop it?

ive had that problem a few times, even when im just playing normally. i sometimes get it after i go LD. but i can go right back in. im guessing its just something that happens when u go ld? i dunno. ive had it happen when i first log onto a char also.

timed out error means that for whatever reason, there was a delay in communication between your computer and the server and that said delay was lengthy enough that your connection "timed out", or gave up trying to connect.

It could, simply, be that your ISP does maintenance in the middle of the night, disrupting your internet service for some period of time.