Muhurat Trading 2022

In a culturally diverse country like India, rituals are a part of a few life actions. People try to find an auspicious time or “Muhurat” most important decisions and occasions. Whether it is a wedding, business launch, housewarming, or investing, they check the position of stars and determine whether it’s in their favour. Similarly, every year on Diwali, the festival of lights, there is an hour-long trading window to invest in stocks.

What is Muhurat Trading?

“Muhurat” is an auspicious time to start something new or good according to the Hindus. Thus, a remarkable hour of the year when the country's people unite to trade or invest their money is known as the Muhurat Trading. It is the trading window that stays open on the Hindu festival of Diwali for one hour.

Diwali is the New Year in India per the Hindu calendar. This year marks the beginning of Vikram Samvat 2079. The Muhurat window on Diwali signifies that investing or trading on this day will yield good returns. Therefore, the stock exchange opens a trading window for only one hour for individual investors and stockbrokers to trade and make a profit or simply invest during this auspicious time.

History of Muhurat Trading

Business owners and stock brokers in India start their new year on Diwali. They open new accounts on this day for the next fiscal year. The broking community specially performs the Chopda Pujan and worships their books of accounts on Diwali. On this day, they worship Lakshmi, the goddess of wealth, fortune, power, and prosperity.

There are several different beliefs about Diwali Muhurat Trading. A non-data-backed theory is that the Marwari traders and investors believe that money should not enter the house on Diwali and, sell the securities. However, Gujarati traders and investors buy shares during this time.

Asia’s oldest stock exchange, the Bombay Stock exchange (BSE), iinitiated the ritual of BSE Muhurat Trading in 1957. The Diwali Muhurat Trading in the National Stock Exchange (NSE) has been conducted since 1992. It has now become a symbolic gesture for individual investors to invest.

While muhurat trading does not promise any profits, it is believed to impact your wealth positively throughout the year. Historically, BSE Sensex has hardly disappointed investors on this auspicious day. In the past few years, Sensex has closed in green almost every year on the Muhurat Trading hour. The past five years of NIFTY and SENSEX performance are given below.

It was only in 2017, 2016, 2012, and 2007, the BSE index saw minor losses in the allegedly auspicious hour in the past two decades. However, it is noteworthy that the Sensex went up by 5.86% in an hour-long session on this special day in 2008.

What happens in Muhurat Trading?

Unlike the usual weekdays where the market is open from 9.15 am to 3.30 pm, the Muhurat Trading window is only open for an hour at a pre-decided time. Typically, the Muhurat Trading session is divided into the following parts:
 
Block Deal Session: Here, two parties (buyers and sellers) agree to buy/sell a security at a fixed price and inform the concerned stock exchange about it.

Pre-Open Session: This session usually lasts for eight minutes and determines the equilibrium price.

Normal Market Session: This is the one-hour actual trading session, just like the regular market sessions.

Call Auction Session: This session is especially for illiquid securities to trade.

Closing Session: In this session, traders and investors can place the market order at the closing price.

Muhurat Trading Timings 2022

Muhurat Trading 2022 will be conducted on Monday, 24th October 2022. If you’re wondering, “what time is muhurat trading today?”, the Muhurat Trading time for this year is as follows.

Things to keep in mind during Muhurat Trading

While Muhurat Trading is auspicious, it does not mean you put your money in any stock and make profits. There are a few things to consider before you start trading stocks.

●    Date & Time: Muhurat Trading session will happen on 24th October 2022 at 6.15 p.m.

●    Volatility: Most traders and investors consider this time of year favourable for investing. Thus, there are a large number of traders sitting in front of the screens and the market can be extremely volatile and directionless. If you want to take advantage of the volatility, choose stocks with high trading volume, as the trading window is only one hour. Investments during this period do not guarantee returns.

●    Be mindful as a day trader: You should keep an eye on resistance and support levels to make better trading decisions. 

●    Settlement: All open positions at the end of the Muhurat Trading session become a settlement commitment.

●    Stick to basics: The primary investing mantras still hold, and you should know a company's fundamentals before investing.

●    Stay aware: Be cognizant of the tips that circulate in groups, social media, news, or in any form for that matter. Many companies tend to advertise their schemes which might not be the best for you without proper consideration. Do not fall for any unauthorized advice whatsoever.

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