Last Updated on Oct 14, 2022 by Aradhana Gotur
Traders and investors eagerly await Muhurat Trading every year. After all, it is considered auspicious, and who doesn’t like to make some investments during Shubh Muhurat and enjoy good fortune, as is believed? In this article, we will talk about the dos and don’ts of Muhurat Trading 2022 to help you prepare for the session better.
Table of Contents
Dos of Muhurat Trading
Learn before you act
If you are a new investor, study the market and your desired stocks and make meaningful, well-informed, data-backed investment decisions. Purchasing stocks blindly during Muhurat Trading simply because it is considered auspicious can turn out to be inauspicious for your portfolio. Especially now that the market has been volatile for quite some time, you should be mindful of what you do with your hard-earned money.
Go long; ignore short-term corrections
The stock market tends to be on the bullish side during the Muhurat Trading session. So you may find stocks that are trading at higher valuations tumbling in the near future due to profit booking. But let this not discourage you. Enter the market with the knowledge that an overvalued market corrects, and the corrected market recovers in the time to come. In short, focus on long-term investment.
Invest in blue chip stocks
Auspicious time doesn’t mean speculative bets can turn out to be profitable. Instead of taking speculative bets, consider investing in quality stocks because they will add strength and stability to your portfolio.
Blue chip stocks are one among this lot. These are large-cap stocks (of mature entities) that are financially sound and relatively less volatile. Even if they tumble, they recover quickly compared to mid and small-cap stocks. Investing in blue chip stocks may be a safe bet if you are a beginner.
Don’ts of Muhurat Trading
Don’t follow the herd
Blindly acting on analysts’ recommendations without assessing your risk tolerance and doing your own research, can land you in deep trouble. Especially during Muhurat Trading, you will see a rise in self-proclaimed experts recommending stocks to buy in Muhurat Trading. The best option? Avoid them!
Instead, take time out to study the market and understand how the macroeconomic factors are impacting it. Then, research the companies whose stocks you wish to buy. Ensure that their fundamentals are strong, finances are sound, and they have the potential to give attractive returns in the long run. Seek financial advisors if need be and only then shortlist the stocks you want to buy during the Muhurat Trading session.
Don’t be under the false impression
Don’t invest with the mindset that you will reap good returns because the Muhurat Trading session is supposed to be auspicious. Honestly, that is no guarantee. Firstly, the stock market cannot be predicted as it behaves in line with macroeconomic developments and investor sentiment. Secondly, the returns depend on the company’s fundamentals.
If a company has good fundamentals, it thrives through downturns, but if they are bad, it can’t sustain even in good times. So don’t dwell on the belief more than you should. Consider it a good start to investing in the stock market if you are new. And if you are an experienced investor, take Muhurat Trading as a Shubh Muhurat to start investing with a better mindset, having learnt the lessons that the market taught you in the last year.
Don’t indulge in options trading
Options are mainly used for hedging purposes and high-leverage segments. They also have less trading time and liquidity constraints. Due to these challenges, you can keep them for some other day.
Don’t fear high valuations and short-term corrections
Since the market has been historically bullish around the Muhurat Trading session, don’t refrain from investing due to inflated stock prices and high valuations. And if short-term corrections are what keep you from investing during the Muhurat Trading session, worry not. Markets are volatile in the short term.
This year, given the current geopolitical situation, rising oil prices, and the falling rupee, the market has remained quite volatile. Nifty 50 has fallen 3.22% in the last 1 month and 3.52% in the last 1 yr. But in the long term, markets recover. So stay positive, buy fundamentally good stocks during Muhurat Trading and hold them for the long term.
Don’t get carried away by just the belief
Diwali is a festival, so investing in the market on this day is considered auspicious. Do not get carried away that there is a promised future prosperity. The Muhurat Trading session does not guarantee a handsome return on investment. The returns depend on various factors like market sentiment, stock fundamentals, economic situation, etc.
Why Tickertape your way through Muhurat Trading?
Muhurat Trading is on Monday, 24th October 2022—less than a month away. The session will remain open from 6:15 PM to 7:15 PM. Aren’t you excited to embark on a renewed journey of stock investing? Have you watchlisted the desired stocks you wish to buy during this session? If you haven’t already, now is the time!
Discover stock ideas using Stock Screener
Use Tickertape’s Stock Screener to discover stocks based on your favourite parameters using over 200 filters! Are you a value investor, or are you a growth investor? Do dividends matter to you more than capital appreciation? Whatever your objective is, the Stock Screener has filters suitable for you. Simply apply them and get a list of stocks based on what matters to you.
Dive into the fundamentals of each stock using Stock Pages
Don’t stop at this; check out individual Stock Pages and evaluate the company based on financial ratios, fundamentals, financial statements, dividend trends, shareholding patterns, current events, and more. Watchlist the stocks that look promising and track their movements till the Muhurat Trading session.
Place multiple stock orders in a single transaction
On the day of Muhurat Trading, you can place multiple buy and sell orders in one go by adding them to the Basket. Ensure that your account is linked to your broker account. Doing this will help you place multiple stock orders right from Tickertape without jumping several platforms. Play around if you wish, and get ready to invest in stocks via Tickertape during Muhurat Trading.
We wish you luck and prosperity this Diwali, happy investing!
Muhurat Trading Frequently Asked Questions (FAQs)
What is Muhurat Trading?
Stock market Muhurat Trading is a ritual in India where stock exchanges conduct a one-hour trading session for investors to trade during Diwali. Investments made on this day are believed to bring luck.
Is Muhurat Trading profitable?
Investing during Diwali Muhurat Trading is believed to be auspicious and bring good fortune. The stock market is usually bullish on this day. However, this doesn’t guarantee the profitability of investments. Stock prices reflect the underlying company’s fundamentals. If the company is strong and has the potential to grow, the stock can give handsome returns over time.
When is Diwali Muhurat Trading 2022?
Muhurat Trading 2022 is on Monday, 24th October 2022. Investments made on this day are considered to bring good fortune.
What is Muhurat Trading time 2022?
The session will remain open from 6:15 PM to 7:15 PM on Monday, 24th October 2022. Muhurat Trading time changes every year.
Can we sell a holding in Muhurat Trading?
Yes, you can sell stocks on Muhurat Trading. What matters is taking good decisions – buying the consistent performers and/or selling the laggards.
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