Diwali 2021: Do’s and don’ts for this Muhurta trading session

“This festive season is approaching amidst volatility in financial markets due to US Federal Reserve crunch, liquidity outflows, FII/FPI selling of emerging markets stocks. In addition, markets are battling heightened input-based inflation, further aggravated by supply side disruptions and persistent COVID cases across the globe,” said Aparajita Saxena, Research Analyst, Trustline Securities.

However, Saxena provided some important dos and don’ts for this Muhurta trading day, uncertainties in Samvat 2078 as follows:

What to do for Muhurta Trading

Small purchases only – tokens

As a symbolic purchase on the eve of this celebration, investors should make an initial investment token purchase that can provide a long-term return on their investment. Hence, this is also the right time for new investors to enter the markets.

invest in quality stocks

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

Avoid Overtrading

It is a common mindset among investors or traders to make some profit on this auspicious day which will be a harbinger of earning substantial profits later on. But for any practical purpose this approach of earning profit should be avoided.

Limit or avoid intraday trading

On this day experienced traders do intraday trading. However, this is a cup of tea for novice investors. Most of the average investors are advised to avoid intraday muhurta trading due to the extremely short trading window and volatility in the market.

Do’s and Don’ts for Muhurta Trading

do not place large orders

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

don’t lose focus

With festivities all around, so there will be excitement on the occasion. However, it is a festive day which does not mean assured returns. Therefore, investors need to focus on the investment philosophy of buying companies with good business models, honest management teams and solid track records at fair valuations for long-term investment tenure.

Avoid falling prey to rumors

Rumors and speculations, unverified suggestions will continue to be in vogue this time too. So, it is better to avoid falling prey to these fascinating and unbelievable news and enjoy this day with family and friends.

Muhurta trading is a favorable time for new investors to enter the equity market. Hence, this festive season should be used to start your journey in the stock market for a prosperous investment/business journey.