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What is Muhurat Trading ? October 25 2021What is Muhurat Trading,

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What is Muhurat Trading?

According to the Hindu calendar, Diwali which is the festival of lights is an auspicious occasion. It represents the triumph of victory over evil, wisdom over ignorance, and light over darkness.

Like every other religious festival, Diwal is surrounded by a myriad of beliefs, rituals, and traditions. Muhurat trading is one such tradition. 

Every year, the stock market sets the timing for Muhurat trading. On the auspicious festival of Diwali, the National Stock Exchange (NSE) will celebrate Diwali Muhurat Trading on November 4, 2021.

The term 'Muhurat' refers to a lucky time. Muhurat is a Hindu term that refers to a time when the planets are in a favourable alignment, ensuring pleasant outcomes.

Muhurat Trading is a frequent practice among Indian traders. This is a one-hour window on Diwali day that is considered lucky for stock investing. Every year, the stock market sets the timing for Muhurat trading.

People who trade during this one hour, according to tradition, have a higher chance of accumulating riches and prospering throughout the year. Most people opt to buy stocks as a gift to Goddess Lakshmi. This is exclusively seen in the Indian stock markets.

What does Muhurat Trading involve?

For a limited time on Diwali, both the NSE (National Stock Exchange) and the BSE (Bombay Stock Exchange) allow trading. The session is usually broken into the following sections:

Block Deal Session - When two parties agree to purchase or sell a security at a set price and notify the stock exchange, this is known as a block deal session.

The stock exchange decides the equilibrium price during the pre-open session (usually around eight minutes)

The majority trading takes place during the normal market hour, which lasts one hour.

Call Auction Session - a trading session for illiquid securities. If a security meets the exchange's standards, it is classified as illiquid.

Traders/investors can place a market order at the closing price during the closing session.

Muhurat trading timings 2021

Muhurat Trading Session: Capital Market
Pre-Open Market: 18:00 – 18:08 hours
Normal Market:     18:15 – 19:15 hours
Closing Session:     19:25 – 19:35 hours

How is Muhurat Trading beneficial?

Because trading volumes are high during the Muhurat trading session, it is a favorable opportunity to purchase or sell stocks. In addition, the market is generally bullish since the holiday atmosphere of prosperity and affluence encourages individuals to be positive about the economy and the markets. As a result, the Muhurat trading session is an excellent time for both seasoned and inexperienced investors and traders.

Diwali is said to bring wealth and success to those who believe in favorable planetary alignments. As a result, if you've never invested in stocks before, Diwali could be a fantastic time to start.

Look for high-quality companies to invest in and acquire some stocks with a long-term perspective and in accordance with your investment plan. If you want to go into stock trading, it's a good idea to watch the markets during Muhurat Trading and do some paper trading to get a feel for how things work. Markets are considered to be volatile since the trading window is only open for one hour. As a result, as a new trader, you should be cautious.

Most investors/traders would purchase and/or sell stocks as a gesture to appreciate the auspiciousness of the day, therefore experienced day traders might gain from this session.

It's possible that the attention isn't so much on profit as it is on the gesture. As a result, experienced day traders might benefit handsomely by placing positions after thorough evaluation. Since the pandemic wreaked havoc on companies and livelihoods, this year has been a disaster for the economy. While many experts predict a successful Muhurat trading session in 2021, you should maintain your enthusiasm in your heart and use your intellect to make trading decisions.

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