Diwali Muhurat trading 2022: 5 tips and tricks you should know before investing

Have you started your research for the stock which you want to hold for a longer period of time to buy on this Diwali muhurat trading session? If yes, then you are a true investor by heart. As we all know that our stock markets, NSE and BSE, are usually closed during the festive holidays, but due to the auspicious occasion of Diwali in which we all buy something that would be considered as an asset, the stock markets will be open for one-hour sessions.

As a new investor, you must be confused between various aspects of investing like which stock to buy, which one will be best trading or investing, and many more. Today, let’s clear out all the confusion and answer every question through some tips and tricks. 

READ MORE: Gold or equities: Where would you invest this Diwali?

Avoid intraday

Yes, it may sound strange as the session is only named as muhurat trading, but there are two reasons behind it-

1. If you are buying any stock for the sake of auspicious times that represent the wealth creation, hold it for the said purpose only, don’t try to make mere profit out of it.

2. Generally, NSE and BSE see a bullish market during muhurat trading sessions, as every investor is buying at that time. After the festival, many traders sell their stocks when they find it profitable. You may face a dip in the market, it is unreasonable to sell in the very short term. Instead, hold it for the long term and let it create wealth for you.

Choose stocks that have growth potential

You invest in a stock for a long period of time and have no intention to sell immediately. So you need to choose the stock carefully which you are going to buy during muhurat trading sessions. The quality of growth your stock must have. You can start by choosing the industry in which you see potential like EV, IT, Solar power, etc.

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Diversification is necessary

If you have a particular corpus of money in Diwali which you have received as a bonus from your employer, you can also look for diversification. You can allocate your money in different categories of asset classes, like stocks, currency, and ETFs. By following traditional practices in Diwali of buying gold, you can buy gold ETFs as well.

Avoid shopping for stocks in huge amounts

Muhurat trading is just for the sake of tradition, you do not have to buy all the stocks in your watchlist. As during the sessions of muhurat trading, market trends tend to be uptrend for one-hour trading sessions. You might have to buy your chosen stocks at an expensive price. 

READ MORE: Received Diwali bonus? Here is a smart way to invest some of it

Do your research

Usually the market shows a bullish trend on muhurat trading, but that doesn't mean the market will behave similarly afterward. So before you pick any stock to buy or sell, do your research, analyze the fundamentals of the stock, and then decide. Efforts on research need to be similar to any usual trading day.

In investing, we can say that there is no better day than today to start your investment journey. But, muhurat trading is a day when we buy stocks to at least start your investment journey toward a financial goal. By following the above-mentioned tips and tricks, you can successfully celebrate Diwali and muhurat trading.

Anushka Trivedi is a freelance financial content writer. She can be reached at anushkatrivedi.com