Diwali is considered auspicious and many investors and traders participate actively on this day. However there are some pros and cons of trading on this day.
The first con is short delivery. Markets are open only for one hour and short selling undervalued less liquid stocks can cause severe loss to short sellers.
The second con is intraday bubble. There are chances of stocks shooting up and then fall. If you are a day trader then using market order can be risky.
If you are planning to buy stocks for long term then please prepare in advance. Check for undervalued stocks with strong fundamentals and use limit order.
If you are buying stocks just because you think it is an auspicious day then buy in small quantities. In 2018 some of the stocks I bought during Muhurat Trading fell on the following day.
Many people consider only buying stocks and many don’t throw light on booking profits. If a person has to buy a stock then there has to be a seller for the transaction to complete. Many people buy stocks on Diwali and who are these that are selling precious stocks on auspicious day ? Well, they are probably booking their swing trading or long term profits on this day. Some consider profit booking too as a good omen.
Zero brokerage. Well by this time you might have come across zero brokerage on Muhurat Trading ads. Those picking stocks for future fall under the category of stock delivery. Some brokers charge zero delivery charges on regular days too. So only day traders make profit from zero brokerage on this day.
Should you day trade on Diwali ? Well, if you are someone who is superstitious and consider making loss on auspicious day to become a jinx, then please stay away from day trading.
Well also don’t forget the law of supply and demand.
Well, that was it for this post. If you want to know about ratios that help you to pick undervalued stocks on Diwali then do check out those posts on this website. As always don’t forget to share the post with your loved ones and yes, Happy Deepawali in advance 🪔 🙂