Muhurat Trading is a special stock market session held every year during Diwali, one of India’s most celebrated festivals. It’s considered an auspicious time for investors to make new investments, as it marks the beginning of the Hindu financial year or Samvat.
Many believe that trades made during this hour can bring prosperity and long-term gains. This article will focus on the custom of Muhurat Trading and the ways to effectively use this short but powerful trading window.
What is Muhurat Trading?
Muhurat Trading is a special stock market session that takes place on Diwali, signifying an "auspicious time" in Sanskrit. This period is believed to be favorable due to the planetary alignment, which many think brings good fortune.
Typically, the stock market remains closed on Diwali, but the NSE and BSE dedicate an hour for this unique trading session, usually in the evening. During Muhurat Trading, traders and investors engage in buying and selling stocks as a symbolic act to attract wealth and prosperity for their financial ventures.
This year Muhurat Trading will take place on 1st November from 6:00 PM to 7:00 PM IST
History of Muhurat Trading
Muhurat trading has its roots in the customs of the traditional business community. Diwali, along with Laxmi Pujan, marks the beginning of the Hindu New Year, called Samvat.
On this auspicious day, businesspeople would start their new accounts, but not at just any time — it was done during the Muhurat, a period considered lucky to honor Goddess Laxmi, the deity of wealth and prosperity.
This age-old tradition made its way into the stock markets too, with BSE holding the first Muhurat trading session in 1957. The National Stock Exchange (NSE) joined in 1992, continuing this practice. Back then, traders and investors couldn’t practice online trading so they would go to the stock exchange physically and carry out their trading within that special hour.
How to Maximize Long-Term Gains During Muhurat Trading?
As you get ready to enjoy the excitement of Muhurat Trading 2024, remember that success isn’t just about making quick trades. It’s about creating a solid base for long-term growth. Here are some tips to help you maximize your long-term gains:
1. Research and Due Diligence
Conducting in-depth analysis is crucial for successful trading. Start with thorough research on potential investments, focusing on blue-chip stocks or fundamentally strong companies.
These are established firms with a history of stable earnings and good management. Look at their financial statements to understand their profitability and cash flow.
Additionally, consider their position in the industry and any competitive advantages they have. This careful evaluation helps in making informed choices that can lead to stable returns over time.
2. Value Investing Approach
Value Investing Approach focuses on finding strong companies that have solid financial health and a history of making money.
Instead of chasing trendy stocks, look for those that are priced lower than their true worth. This way, when the market recognizes their value, you can see significant gains.
Paying attention to a company's real value helps protect investments and ensures a better chance for long-term success.
3. Diversification Strategy
A good way to manage risk is through a variety of investments. This means putting your money in different types of assets, like stocks, bonds, and real estate.
Spreading investments across various sectors helps protect against losses if one area performs poorly.
Also, consider trading in markets outside your country to take advantage of global opportunities and reduce reliance on the local economy.
4. Take Advantage of Market Sentiment
Muhurat Trading often brings a positive vibe to the market, making it a good time to invest. This upbeat atmosphere can lead to higher buying interest in certain stocks.
For example, if a popular tech company releases exciting news before Muhurat Trading, its stock might surge as investors feel optimistic.
Taking advantage of this positive sentiment allows investors to purchase stocks that could rise in value, helping them achieve long-term gains.
5. Plan for Future Adjustments
After Muhurat Trading, it’s important to regularly check how your investments are doing. If a stock isn’t performing well or if market conditions change, think about making adjustments to your portfolio.
For example, if you bought shares in a technology company during Muhurat Trading, but later faced unexpected challenges, you might decide to sell some shares and trade in a more stable sector like consumer goods.
This helps keep your investments balanced and in line with your goals.
Conclusion
Muhurat Trading is a special opportunity to kickstart your trading for the year ahead. Use this brief trading window to make thoughtful decisions and build a strong portfolio. Remember, it's not just about quick gains but long-term success. To make your Muhurat Trading experience even better, use the stock trading app for seamless trading and easy access to market insights.
Disclaimer: No Business Standard Journalist was involved in creation of this content