What is Muhurat Trading?
Muhurat trading is a practice that is followed by traders in India. Before diving into the blog, let’s first define the word Muhurat. The word Muhurat simply means an auspicious time. It is typically considered to be a time when planets and the cosmic energy are aligned in such a way that ensures positive results on endeavours.
Thus, this Muhurat trading is a practice that is followed by market participants of various investment assets. It is a one-hour trading duration on the day of Diwali that is considered to be auspicious to invest in something.
Tradition of Muhurat Trading
The tradition of Muhurat trading has been commonplace amongst several communities in India, with the day of Diwali marking the beginning of a new year. To begin the occasion, a ritual is performed to business account books and safes on Dhanteras as well as on Diwali to signify the beginning of a new year. Stock brokers performed ‘Lakshmi Puja’, a ritual dedicated to the goddess of wealth and only after which the customary Muhurat trading takes place.
Diwali also marks the beginning of the a new year, thus it is believed that Muhurat trading on this day brings in wealth and prosperity throughout the year. So in the same fashion, Diwali Muhurat Trading 2022 is expected to happen on the 24th of October.
What happens during a Muhurat Trading session
There are two kinds of investments that are typically done during a Muhurat trading session on the day of Diwali. Investors sometimes place token orders or buy stock for their children, which are generally held for the long term and sometimes never sold.
On the other hand, short term or intraday traders try to book profits within the Muhurat trading session, however small they may be as it signifies that they would be able to stay profitable for the remnant of the year.
Things to Keep in Mind before indulging in Muhurat Trading?
So some of the things to keep in mind is that a lot of people in India would be participating in the muhurat trading. While this generally is a good thing, one should be wary of unnatural price breakouts or breakdowns due to high volatility of cryptos and lower market depth. Hence, to reduce one’s risk amid volatility, a token trade with a reasonably small amount of capital would be a good way to go.
Other things to keep in mind is to keep the principles of trading in mind and not fall into the trap of FOMO and enter only at the most viable trading opportunity in the market to improve your chances of scoring a profit in the auspicious hour.
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