Muhurat trading is the auspicious stock market trading for an hour on Diwali (Deepawali). It is a symbolic and old ritual, that has been retained and observed for ages, by the trading community. This year, the Muhurat trading session will begin at 6:15 pm and end at 7:15 pm today. The special trading window opens following Hindu Panchang, marking the beginning of a new Samvat.

“This festive season is coming amid volatility in the financial markets due to US Federal Reserve tapering, liquidity outflows, FII/FPI selling of emerging markets equities. Apart from that, markets are battling with heightened input-based inflation further escalated by supply side disruptions and persistent Covid cases around the world," said Aprajita Saxena, Research Analyst, Trustline Securities.

However, Saxena provided some crucial do’s and don’ts for this Muhurat trading day on how to play uncertainties in Samvat 2078 as follows:

Do's for Muhurat Trading

Only small purchases – token

As a symbolic purchase on this festive eve, investors should make a token purchase of an initial investment that could deliver long-term return on their investment. So, this is also right time to enter markets for new investors.

Invest in Quality stocks

Another important thing to do for the Muhurat trading is to buy reliable and quality stocks at some reasonable valuations.

Avoid Overtrading

This is a general mentality among investors or traders to earn some profit on this in this auspicious day that would a harbinger of earning substantial profits going ahead. But for some practical purpose, this approach of amassing profits should be avoided.

Limit or avoid intraday trading

Seasoned traders indulge in intraday trading on this day. However, this is a cup of tea for novice investors. Most average investors are advised to avoid intraday muhurat trading due to the extremely short trading window and volatility in market.

Don’ts for Muhurat Trading

Don’t place large orders

Since, this is a not a normal trading session but a short trading session (lasting for 1 hour) and there is always a liquidity constraint. Hence, it is advisable to avoid placing any large orders.

Don’t lose focus

With festivity all around, so there will be excitement in this occasion. Even though, this is an festive day that does not mean assured returns. Therefore, investors will have to focus on the investment philosophy of buying companies with good business models, honest management teams and solid track records good at a reasonable valuation for the long-term investment period.

Avoid falling prey to Rumors

Rumors and speculations, unverified tips will still be in circulation this time. So, it is better to avoid falling prey to these catchy and unreliable news and enjoy this day with family and friends.

Muhurat trading is favorable time for new investors to enter the equity market. So, this festive season should be used to initiate one’s journey in stock market for prosperous investing/trading journey.