Diwali Muhurat Trading 2021: Dos and Don'ts for stock market investors

Diwali is a very special and auspicious time for the stock market. Despite the market being closed on the festival day, the Muhurat Trading takes place for one hour where investors are given a window to engage in trading. As Diwali marks the beginning of the new year for the Hindus, investors wait for the ‘Muhurat Trading’ session to kick off their business or financial dealings. During this auspicious occasion, stock market traders are allowed to carry out special share trading, which is called the ‘Muhurat Trading’. Muhurat Trading is a common and old ritual that is practised by traders in India. For investing in shares, there is a one-hour time that is considered to be auspicious on the day of Diwali. The stock exchange specifies the exact time of Muhurat Trading every year. This year, the session will begin at 6:15 pm and close at 7:15 pm. Dos for Muhurat Trading: As and when the trading window opens, investors who are interested can make a token purchase of an initial investment that can give them a decent return and bring prosperity. During the Muhurat Trading time, the market is less volatile as traders prefer to buy stocks rather than sell them. Always remember to buy reliable and quality large-cap stocks for long-term investment plans. Don’ts for Muhurat Trading: As the Muhurat Trading window lasts only for an hour, liquidity constraint remains, which is why investors are recommended not to place any large orders during the session. It is important for all traders to remain focused and keep aside the festive spirit. Additionally, the session is also known for misleading people, so traders must avoid creating investments based on rumours. To avoid loss in the volatile session, investors are suggested to focus on large-cap companies. Important points to keep in mind before indulging in Muhurat Trading: At the end of the trading session, all open positions will result in settlement obligations. Those interested, especially the traders, must keep a close watch on the resistance and support levels. Because, during the sessions, the market can be volatile with no specific direction. Before investing in stock for long term, investors must stick with the fundamentals of a company including the investment plan and risk tolerance. Those who want to profit from the volatility must ensure that they choose stocks with good trading volumes.