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Yes, you must use an extension cord specifically rated for outdoor use to power outdoor lights, such as Christmas lights. Extension cords intended for indoor use lack the protective properties to withstand exposure to outdoor elements. To safely hang and power lights outside your house or in your yard, always connect them to an outdoor power source using an outdoor-rated extension cord.

How many string lights can be on one outlet depends on a number of varying factors, including the total wattage of your circuit, the type of lights, the energy needs of the lights, and cord specifications. It’s better to play it safe here to protect your circuit, so figure out the max wattage of your circuit, compare that to the lights, and move on from there. Generally speaking, LED string lights require less energy than incandescent bulbs, translating to a higher number of lights per circuit. 

If you need to visually inspect your Christmas lights to determine which are good and which need replacement, there are a few things to look for. First, look for discoloration, such as a dark spot or two on the inside of the glass. The spot is an indication of a burnt filament. Also, look for missing filaments, cracked bulb glass, and broken sockets.

Cold weather can cause older incandescent Christmas lights to fail by causing cracks in the finish or the glass itself. Modern LED lights are affected in the opposite way and perform even better as the temperature drops.