With the festive season approaching, both seasoned and novice investors anticipate Muhurat Trading on the auspicious festival of Diwali.
It is a trading window that is open for 60 minutes during the late hours of Diwali.
For a long time, traders have observed this tradition, and it is thought that trading during the’muhurat,’ or auspicious hour, gives success and financial progress to the stakeholders.
What is Muhurat and Muhurat Trading?
Muhurat is a Hindi word that means “auspicious time.” According to Indian traditions, the period around Diwali puja is considered one of the most auspicious for finances.
Despite the fact that exchanges such as the NSE and BSE define the time of Muhurat trading each year, it usually coincides with Diwali puja (held on the evening of the festival).
Muhurat trading has been practised by dealers across the country for more than 60 years.
Traders prefer to deal on the market in order to grow and make profitable investments. The custom is specific to Indian markets.
Reasons for the popularity of Muhurat trading
There are so many reasons, the festive spirit being one of them, which could be attributed to the popularity of muhurat trading.
With a wide range of sub-divisions among cultures and beliefs in Indian society, there is a common understanding that Diwali is one of the best times to initiate new financial investments.
Hence, investors and traders use this auspicious time to make token investments during Muhurat trading hour.
Muhurat Trading 2022
Investors can trade in all segments, including equity, derivatives, and SLB. The current year’s pre-open session will begin at 6:00 PM and end at 6:08 PM.
In addition, the matching timings on the muhurat trading session will be from 6:08 PM to 6:15 PM. Trade modification in the call auction will end at 7:45 PM.
It is vital to notice that all trades carried out during this time shall result in settlement obligations.
Dos and Don’ts
There is no strict list of dos and don’ts that ought to be followed by investors during the one-hour trading period.
After all, the entire exercise’s purpose is based on people’s beliefs and sentiments. However, it is often advised to focus on long-term investments and make token investments during the period.
Since this period is deemed auspicious, it gives a psychological advantage for new investors who wish to initiate their journey in the stock market.
Historically, the period has demonstrated bullish trends. Around 80% of the time, the markets ended up in green after completing the one-hour trading period. It could be attributed mainly to the market’s positive sentiments and the investors’ psyche.
Things to avoid during Muhurat Trading
As investors look forward to trading and investing during the auspicious period, it is essential not to get too carried away as the trends during the Muhurat trading might not reflect the long-term mood of the stock markets.
Hence, making reckless investments and focussing on F&O based on the one-hour trends should be avoided. In addition, one must prevent rumours and heavy exposure in stocks and scrips.
Summing up
