Who Can Benefit from Muhurat Trading?
The Muhurat trading Session is a good time to buy or sell stocks since the trading volumes are high. Also, usually, the market is bullish since the festive spirit focused on prosperity and wealth drives people to be optimistic about the economy and the stock markets. Hence, it is a good time for both investors and traders, experienced and new, to benefit from the Muhurat trading session.
For people who believe in auspicious planetary alignments, Diwali is celebrated for bringing in wealth and prosperity. Hence, if you have never invested in stocks, then Diwali can be a good day to begin.
Look for high-quality companies and purchase some stocks with a long-term horizon and in sync with your investment plan. However, if you are planning to enter the stock trading domain, then it might be prudent to observe the markets during Muhurat Trading and probably do some paper trading to get the hang of things. Markets are known to be volatile since the trading window is open for only one hour. Hence, being watchful as a new trader is recommended.
Experienced day traders can benefit from this session since most investors/traders will buy and/or sell stocks as a gesture to acknowledge the auspiciousness of the day.
The focus might not be on profitability as much as it might be on the gesture. Hence, seasoned day traders can make good profits by taking positions after careful consideration. This year has been bad for the economy since the pandemic impacted businesses and livelihoods alike. While many experts are hoping for a good Muhurat trading Session in 2020, you will do well to keep the fervor in your heart and make trading decisions with your head.
Things to keep in Mind Before Indulging in Muhurat Trading
Here are some aspects that you must keep in mind before you start buying or selling stocks during the Diwali day trading time (Muhurat Trading).
- Most traders and investors consider this period to be auspicious to make investments.
- All open positions at the end of the trading session will result in settlement obligations.
- While the Muhurat trading session will be held on Saturday (November 14, 2020), the markets will be closed on Sunday and Monday (November 16, 2020, on account of Diwali Balipratipada)
- Traders must keep a close eye on the resistance and support levels. During Muhurat trading Sessions, it has been observed that the markets can be volatile with no specific direction. Hence, as a day trader, keeping the resistance and support levels at the center of your trading decisions will help you make better trading decisions.
- Investors must ensure that they stick with the fundamentals of a company before investing in its stock for the long-term. The Muhurat trading session is usually filled with a lot of excitement and rumors can spread fast. Stick with the basics and invest in sync with your investment plan and risk tolerance.
- If you plan to profit from the volatility, then ensure that you choose stocks with good trading volumes since the trading window is only for one hour.
- Investing during this period does not guarantee returns. Even if the stock performs well on Diwali, its performance in the future will depend on its fundamentals and macroeconomic factors. Invest smartly.
