Muhurat trading is a special one-hour trading session that is held on Diwali as this is considered a very auspicious day in India. This is the time when many traders invest with a strong belief that these investments will bring prosperity, luck, and financial growth for the year ahead. It is quite an old tradition and is deeply rooted in the Indian stock market.
In this blog, let’s learn more about muhurat trading, how it works and why it matters.
Muhurat Trading Date & Time 2024
Muhurat trading for 2024 is set to happen on Friday, November 1 from 06:00 PM to 07:00 PM. However, there would be a short pre-opening session from 05:45 PM to 06:00 PM. You can trade equities, F&O, commodities, and currency during the muhurat trading window.
Historical Background of Muhurat Trading
Before we move ahead and learn things in detail, let’s briefly discuss the background of muhurat trading. As per records, muhurat trading has been practiced for decades in India and it is linked to the country's cultural and religious beliefs. The word "Muhurat" refers to a specific time during which an action carried out is believed to bring positive things in life. As Diwali is one of the most important festivals in India, muhurat trading is observed across the country on this day.
Moreover, in Hindu culture, Diwali also marks the beginning of a new financial year for many businesses. To honour this tradition, stock exchanges in India like the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), hold a special muhurat trading session during Diwali every year.
How Stock Market Muhurat Trading Works?
Muhurat trading is a special stock market trading session and hence, it is a bit different from the usual stock market sessions. The major difference here is that while regular trading happens throughout the day, muhurat trading is a short one-hour session. This special one-hour time is carefully selected by the stock exchanges and is announced in advance. It usually happens on Diwali evening when investors can make their trades.
But what exactly happens during this session? Well, there is nothing special as far as rules are concerned, as you can buy and sell shares just like on any other trading day. However, as it is for a short duration, there is a lot of focus on quick decisions. That’s why investors prepare their trades in advance and execute them quickly within the muhurat trading time window.
Also Learn: A Guide to Gamma in Options Trading: Meaning and Example Scenarios
Steps to Participate in Muhurat Trading
There is a very simple process if you are interested in joining the muhurat trading session, and here are the steps:
Step 1: Open a trading account with a trading platform like Tradejini for buying and selling shares.
Step 2: Keep an eye on announcements from the BSE and NSE to know the exact muhurat trading time.
Step 3: Plan your investments in advance to make the most of this short trading session.
Step 4: Place your orders quickly to avoid missing out.
How the Market Behaves During Muhurat Trading?
Now that you know the basics of muhurat trading, let’s learn about the market dynamics during this time. The stock market during muhurat trading tends to behave differently than on regular trading days. Here’s what you can expect:
- The market is usually less volatile during muhurat trading, and this means that stock prices would not fluctuate as much as they do on a normal day.
- This is the time when investors often focus on symbolic purchases as many people believe that investing during the muhurat trading time brings good fortune.
- The atmosphere of muhurat trading is positive and festive, and this positivity often reflected in the stock market with steady price movements.
Why Muhurat Trading Matters?
Muhurat trading is considered important for many reasons and some of the significant ones are:
- Muhurat trading is a way to honour cultural and religious beliefs.
- Many traders believe that making investments during this time would bring them financial success throughout the year.
- As the market sentiment is generally positive during muhurat trading, it is a good opportunity for investors to start the year with optimism.
Cultural and Psychological Impact on Investors
For many investors, especially those who cherish Indian traditions, muhurat trading is a big deal! Diwali is not just about lights and sweets, it is also about embracing new beginnings. Hence, muhurat trading is like hitting the refresh button on your finances, clearing old debts and stepping into the new year with hope and positivity.
That’s why the whole vibe during muhurat trading is electrifying. Investors jump in, believing that this special time would bless their investments with good fortune. So, it is all about making that fresh start.
How Muhurat Trading Differs From Regular Trading
Although muhurat trading follows the same basic principles as regular trading, there are a few notable differences:
- Muhurat trading lasts for only about an hour, compared to regular trading which happens for about 6 hours in a day.
- The muhurat trading session is more focused and fast-paced.
- On muhurat trading, it is common to see investors placing small trades.
- Trading volumes during muhurat trading are usually lower than on regular trading days as only a few people participate.
Can You Trade Derivatives During Muhurat Trading?
Definitely! Along with stocks and commodities, you can trade derivatives like futures and options during muhurat trading. Keep in mind that muhurat trading is just like any other trading day. However, most people focus on buying and selling stocks during this session.
Conclusion
Wishing to start the financial year on a lucky note? Do participate in the muhurat trading on Diwali evening. If you want to make your trades smoother and faster, then check out the CubePlus App by Tradejini!
With this user-friendly app, you can trade during the muhurat session with just a few taps. Also, the low-cost brokerage is a great bonus for you!
So, download the Tradejini app now!
Also Read: Crafting Your Stock Trading Strategy for Muhurat 2024 | Samvat 2081
