What is Muhurat Trading?
- 10 Jul 2023
- By: BlinkX Research Team
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For centuries, the trade community has been doing muhurat trading, as an ancient rite. This is the fortunate one-hour trading that takes place on the day of Diwali, and the stock exchange sets the timing for it each year. Online share trading is a long-held notion that trading during the Muhurat will bring a trader or investor money and success for the entire year. Most traders buy stocks during this session, primarily held in the evening.
The term "Muhurat" refers to an auspicious period, and according to the Hindu calendar, this is when the planets align in a particular manner, making it prosperous to do business. During this season, most traders engage in business for sentimental, religious, and customary reasons.
How did it all start?
Only the Indian stock markets provide Diwali Muhurat Trading, and brokers used to create new settlement accounts for each of their clients on the day of Diwali during the Muhurat trading session. A similar custom is observed in the stock market, where Laxmi puja is performed on the day of Diwali, and investors buy shares of reputable firms to keep for future profits. Muhurat trading sends us two loud and obvious signals: concentrate on quality and invest with long-term objectives.
Table of Content
- How did it all start?
- Who Can Profit from Muhurat Trading?
- What impact does Muhurat Trading have on stocks?
- Considerations to Make Before Engaging in Muhurat Trading
- Muhurat Trading Hour's Importance
- How soon should you begin trading?
- Should I purchase stock when the market opens?
- Conclusion
Who Can Profit from Muhurat Trading?
Diwali Muhurat Trading Sessions is a well-established custom in India. According to Hindu tradition, there are specified periods when acts must be done. Hindus have followed astrological advice for thousands of years and believe that particular tasks must be completed at specific times. When significant events occurred, the financial markets in India have occasionally been closed.
Diwali Muhurat Trading Sessions can be advantageous for investors, especially those looking to purchase or sell a significant number of shares. It might be challenging for individual investors to determine which day is deemed lucky for trading since they sometimes lack expertise in the stock market. For instance, you could be aware that buying stocks is discouraged on Fridays and Saturdays. However, you must perform further research before making transactions because each stock has a Muhurat date.
What impact does Muhurat Trading have on stocks?
Due to the unpredictability of the stock market, experts advise taking advice from brokers, market analysts, etc. or learning how to manage their money in such circumstances. Even commodities are traded alongside equities, and portfolio management requires the expertise of a seasoned trader or broker.
Numerous stock brokers routinely report their performance before and after the trading day, so there is never a lack of information on how the market performed during Muhurat Trading hours during the last Diwali market events.
The post-Diwali days market usually is favorable, providing short-term investing chances for risk-averse investors, according to the last ten years. The price of gold is less influenced if the stock market becomes erratic over an extended period, making gold ETFs during Diwali often a safer investment. Nevertheless, price growth is anticipated to be modestly positive in the near future.
Due to the heightened activity, you should still keep an eye on your portfolio even if you opt not to invest during the Muhurat Time. As a result, choices should be made with a long-term perspective while promoting small investments based on professional counsel.
Considerations to Make Before Engaging in Muhurat Trading
Register your trading account: Make sure to open an NSE/BSE account well in advance if you don't already have one for Diwali Muhurat Trading so that market data is available when trading starts and doesn't interfere with your performance.
Check your accounts twice: Before trading starts, ensure all KYC (know your customer) documentation, such as identification and address evidence, is readily available. If incomplete or inaccurate information is discovered later, exchanges may impose severe fines.
Check the volume: Volume levels reveal investors' level of interest in certain assets, directly influencing prices during muhurat transaction time.
Muhurat Trading Hour's Importance
Muhurat Trading has cultural significance in addition to its commercial value. Investment flows, and festivals highlight their significance by providing the ideal environment for fresh competitors to enter the market with energy. Since everyone will focus on market developments, the Muhurat Trading time will be in the spotlight. Since many people are calculating the new fiscal year during Diwali, businesses are encouraged to acquire and sell stock options.
Additionally, the practice was adopted by brokerage companies as a result of this trend over the years, and investors continue to be motivated by the idea of making money. However, investors should proceed cautiously because not all Diwali trends provide the anticipated rewards. The following are the three key factors that investors find Muhurat Trading charming.
A good time to invest in during the Muhurat Trading hour, which is seen to be a good time of year to do so for long-term prosperity. Beginning with the new year, many brokerage companies, stock exchanges, and company owners begin keeping books of accounts.
New year, a new investment vehicle justifies new investors. Muhurat Trading Hour draws a lot of new investors to the stock market because of its cultural significance. This day serves as a reminder for beginning investors to comprehend the market. Additionally, on this day, individuals frequently trade equities, particularly passive investors.
How soon should you begin trading?
Although various brokers may give you different recommendations on trading opening hours, brokers often advise trading about 20 minutes before the opening bell.
However, suppose equities are locked 17 minutes or more after the opening bell. In that case, you should sell them right away since, at that point, when markets are open, brokerages frequently conduct automated trades that cause dramatic price fluctuations.
Should I purchase stock when the market opens?
This primarily relies on your objectives. Purchasing at the opening bell would be good if you were looking to profit from the upward movement because equities will likely begin higher than their previous close price. On the other hand, if your main objective is to minimize losses, it might be wiser to hold off on buying until after prices have stabilized after experiencing significant volatility shortly after the opening bell.
Since trading during the NSE session during the Diwali muhurat offers an excellent chance to maximize profits, you should try it. There are always ups and downs in business, whether you're trading stocks or commodities or engaging in any other type of activity. Even the best-laid plans can occasionally fall flat right out of the gate due to unanticipated circumstances. Therefore, when you intend to embark on a new endeavor, it is crucial to be informed of all that is pertinent. In this manner, even if things don't go as planned, you may take actions that won't allow your money, time, and efforts to go to waste.
Conclusion
Most of the time, the muhurat trading session has been profitable for investors. A little heavenly favor won't hurt in the financial markets, and buying shares during the lucky window is thought to bring luck, money, and prosperity. Returns on investments made during this timeframe are not guaranteed.
Even if the stock has a good Diwali, its fundamentals and macroeconomic variables will influence its future performance. Invest wisely. Since the Indian stock exchanges select the Muhurat trading time, it might alter yearly. Using user-friendly blinkX app, you may streamline the trading process and come to informed judgments. It offers convenient mobile trading, comprehensive analytical tools, and real-time market data.