Festive excitement can make even seasoned investors a little careless, and the days around Lakshmi Puja are no exception. Anyone planning to join Diwali muhurat trading will benefit from preparing calmly instead of reacting on the spur of the moment. A few simple habits can turn a hurried, emotional experience into a smooth and rewarding one. Knowing the muhurat trading time well in advance, along with the structure of the pre-open and closing windows, is the first step in that preparation.
Check Your Account Readiness
Start with the basics. Ensure your demat/trading account is active, your KYC details are updated, and your bank details are mapped correctly. Log into your trading app 1-2 days in advance to ensure your password, two-factor authentication and mobile number all work. You do not want to be left scrambling on the day!
Ensure you have sufficient funds. You will actually be executing trades so make sure you have enough funds or shares to trade. Put your funds in early to avoid any issues during the festival period, as this will fall on the weekend this year so there may be some differences in the banking system. If selling, ensure you have enough free shares to sell.
Keep your watchlist short and simple
A common mistake many make is to get carried away and start looking around. Create a short list of 3-5 stocks that you know. For each stock, think about why you want to trade them. Maybe they have a solid balance sheet, a good dividend history or are leading in their industry. This will help you to keep your cool while the price is moving around.
Also consider how they fit into your overall portfolio. If you already have lots of one sector, adding more may increase your concentration risk. Try to make sure that whatever you buy works with your portfolio. Think of the festival as adding one thoughtful brick to your wall which has been built over the years.
Plan your order types
Order types can be very important. Limit orders will give you more control over what you are paying for your stock, while market orders may result in you getting filled at a price you were not expecting. As the window is short and the quotes can move quickly, usually it is best to go with a limit order.
Many investors like to purchase a small number of shares as a symbolic gesture. This is fine! However, set yourself a maximum amount that you are happy to spend. This will prevent you from getting carried away and then regretting it in the morning. Write down how much you are going to spend.
Also consider the staggered times. Usually the exchange will open with a short pre-open period. There will also be a closing window after the session. During the early part of the pre-open period, orders will be matched in a certain way. If you are going to take advantage of this look at your brokers guidelines. Otherwise just wait for the session to begin as this will feel familiar.
Stay emotion-free
While it can be a fun time, do not let this influence your decisions. Avoid any tips from family groups or social media. Stay away from guaranteed gain tips. Nobody can guarantee you any returns and just because it is a lucky date, it doesn’t mean the stock is risk free.
Try to keep your expectations realistic. The point of buying symbolically is to kickstart the new Samvat on a positive note. If your stock goes up, great! But do not change your strategy. If it drops slightly, remember that this is normal and your theory should be reviewed over years.
Set up an easy post-session routine.
Once the bell has gone, spend a few minutes reviewing your contract note. Ensure that you have executed the correct trades. Write down how much you paid, how many shares and why you bought in a personal journal/spreadsheet. This will help you to review your decision making in months time.
Use this as an opportunity to review your overall financial goals. The new Samvat is a great time to review your insurance, emergency fund, SIPs and long term goals. Many families will sit down to review their financial plan alongside their account books. This is a lovely way to incorporate tradition into your money management.
Remember to enjoy the day! Get your lamps lit, have some sweets and spend time with your loved ones. As you have prepared well, you will not have much stress about the market time and can enjoy the rest of the festival. As your accounts are set up, list is clear and expectations are realistic the session will be a peaceful and confident start to your new financial year.
