Muhurat trading is a one-hour trading session that takes place on Diwali evening, as per the Hindu calendar. The term 'Muhurat' refers to an auspicious time, and during this trading session, investors and traders buy and sell shares, seeking prosperity and good fortune for the coming year. Stock exchanges specify muhurat trading time a few days before Diwali.
Muhurat trading is open to all investors and traders, just like regular trading sessions. Both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) host this special session. Investors can place orders through their brokers during this time. During this time, the market actively opens for trading in equities, derivatives, and currency derivatives. However, note that commodity trading is also allowed during muhurat trading.
Here’s what happens during muhurat trading:
Two parties (buyer/seller) agree to buy/sell security at a certain predetermined price and inform the exchange about it
The stock exchange fixes the equilibrium price, which is achieved when demand equals supply
The one-hour trading session happens
Next traders/investors can place a market order at the closing price
Muhurat Trading 2023 will take place on Sunday 12th November 2023. Stock exchanges are yet to announce the timings for the same.
When trading during Muhurat trading, there are some important things to keep in mind:
Plan Ahead: Before you start trading, have a clear plan in place. Know which stocks you want to trade and set your buying and selling targets. Conduct a thorough research on the stocks you want to trade in. A robust plan will help you make informed trading decisions.
Stay Informed: Keep yourself updated on market news and trends. This will help you pick the right stocks. You can follow brokerage firms' financial news channels and social media handles to stay updated.
Use Stop-Loss Orders: Protect your investments by setting stop-loss orders. This ensures that you automatically sell a stock if it starts falling beyond a certain point.
Diversify: Don't put all your money into one stock. Diversify your investments across different sectors across industry verticals to reduce risk.
Keep Emotions in Check: Avoid making impulsive decisions based on emotions. Stick to your trading plan, even if the market gets volatile. Impulsive trading, more often than not, results in losses.
Start Small: If you're new to trading or muhurat trading, consider starting with a smaller investment amount. This ensures even if trading doesn’t go as per the plan, the losses aren’t much.
Practice Patience: Muhurat trading is just one hour long. Be patient and avoid rushing into trades. Make sure to execute well-thought-out strategies to maximise gains.
Muhurat trading is not just a financial event. It is a tradition that enriches the lives of market participants. It brings together the worlds of finance and faith, promoting the ideals of prosperity, integrity, and optimism.
As you prepare for Muhurat trading this Diwali, remember that it is a time to trade with a sense of purpose and gratitude for a prosperous year ahead. Happy Diwali and Happy Muhurat Trading!
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