Online share trading is always a hectic activity that requires deep research and market awareness. To make the most of market price movements, you need to have the right trading tools handy. Samco Securities makes this possible, with a wide range of features and options available free of cost in the Samco trading app.
In fact, if you have a Samco trading account and can access the Samco app, you’ll find that festive trading during the Dussehra season is easier now than ever before. Nevertheless, you need to ensure that your strategy for trading during the Dussehra period is aligned with the specific needs of this season.
So, in this article, we explore some useful tips that can help you understand how traders can celebrate Dussehra in a fitting manner.
The Key Considerations for Trading on Dussehra
Trading during the Dussehra festival season is quite similar to trading on other days. However, there are a few key considerations that you should be mindful of.
Dussehra Trading Holiday
Dussehra is typically the tenth day of the festival, which follows the nine days of the Navratri celebration. In India, the day of Dussehra is a trading holiday. So, you will not be able to trade in the stock market on Dussehra. This year, the trading holiday falls on October 12, 2024, which incidentally happens to be a Saturday. So, the market would have remained closed anyway, given that the day is a weekend.
No Special Muhurat Session
While the Diwali season brings in a special Muhurat trading session during the auspicious window chosen by the stock exchanges, no such exclusive session occurs during the Dussehra festival. That said, historical data has shown that investing in the markets in the period between Navratri and Diwali has been rewarding for most investors. In 9 out of the last 10 years, the Sensex has delivered positive returns during the period from the first day of Navratri to the Diwali Muhurat trading session.
A Quick Guide for Online Share Trading During the Festive Season
Now that you know about the important considerations regarding trading on Dussehra, let us discuss some useful and practical tips about how traders can celebrate this festival.
Develop a New Trading Strategy
Dussehra represents new beginnings. Beyond the symbolism, this may also be an ideal time to explore new trading strategies. So, take a step back to analyse trends, review market news and educate yourself about techniques or strategies you haven’t tried yet.
Whether it involves moving towards swing trading, experimenting with options and futures, or diving into technical analysis, embracing something new could help you take advantage of more opportunities in the market. Approach this with a mindset ready to learn and adapt, just like the Dussehra festival urges us to continuously evolve and improve.
Reassess Risk
The festive season brings a natural break for many people. So, if you do not want to jump into festive trading right away, this may be a good time to rethink how much risk you are taking and whether or not that is the optimal level for your portfolio. Are you over-leveraging on certain positions or neglecting risk management altogether?
Dussehra encourages you to look at such crucial questions and find the right balance — both in life and in your trading portfolio. You can consider diversifying your assets, reallocating funds into safer investments and balancing high-risk trades with stable transactions to safeguard your capital while still allowing for growth.
Learn from the ‘Dussehra’ Principle
In Indian culture, Dussehra symbolises the strategic timing of Lord Rama’s victory over Ravana. There is a valuable lesson in this story for traders eager to get better at online share trading. It teaches the importance of striking at the right moment, or, in other words, entering the market at the right time.
Whether you want to trade a price breakout trade or a significant price reversal, timing is key. Review your entries and exits for each trade, fine-tune the use of technical indicators and make sure you are not rushing into trades. Just like the Dussehra lore celebrates a well-planned move, apply patience and precision in your online share trading.
Balance Your Wins with Discipline
Dussehra is also a celebration of the victory of good over evil. When applied to the principle of online share trading, it can symbolise many things. You can draw parallels with your victory over emotional trading by adopting an objective, research-based approach.
Additionally, it can also symbolise a balance between your wins and trading discipline — which is possible if you master the technique of using stop-losses. Review your trades and see where stop-losses could have saved your capital from further erosion. This way, you can treat this Dussehra as the perfect time to implement tighter risk management rules.
Trade the Festive Sentiment
Navratri and Dussehra mark the start of India’s biggest festive shopping season, which drives up consumer spending. Research shows that the first phase of this festive season, which spans the nine days of Navratri followed by the Dussehra festival, accounts for up to 50% of the festive sales.
To trade this festive sentiment, focus on stocks related to consumer goods, FMCG, retail and e-commerce platforms. These sectors often see a surge in demand during this period, which may lead to higher stock prices. You can also look for stocks of companies that announce festival offers, discounts or major sales events. Leverage the festive boost to trade short-term momentum, but keep an eye on market trends and festive buying patterns.
Watch for Volatility
During the festive season, market activity tends to slow down because traders and investors may take breaks from online share trading. This can lead to lower liquidity in the market. However, the reduced participation may reduce price stability and lead to higher volatility. The market may also be more sensitive to other news and developments.
So, you must be cautious of sudden price movements due to low volume. It's advisable to adjust your position sizes, set tighter stop-losses and avoid holding high-risk trades during market hours where participation is low — like during the afternoon sessions. Use the festive lull to plan your moves carefully and protect your capital.
Be Wary of the Pre-Dussehra Rally
The Dussehra season often comes with a lot of speculation and optimism, which may cause a pre-festive rally. So, in the lead-up to the festive trading season, keep an eye on the market for stocks that rise because traders expect strong sales or earnings reports.
However, remember the trading adage of buying the rumour and selling the news. This is because stocks may correct right after the festival if the expectations do not match the reality. To avoid this, you can consider taking profits just before Dussehra in October 2024 if you notice a surge in price based on hype — instead of holding on to the shares for too long.
Ride the Q2 Earnings Wave
Dussehra and Navratri usually coincide with the announcement of Q2 earnings results for many Indian companies. This means you can use the festive trading period to look for stocks that may post positive earnings surprises, especially in sectors that benefit from festive spending.
Stocks that exceed earnings expectations often experience short-term price jumps. So, try to keep a close eye on companies that have historically performed well during the festive season and use fundamental analysis to spot potential outperformers.
Conclusion
These pointers can help you ace online share trading during the Navratri and Dussehra festival season. To track the markets real-time, you can open a demat and trading account with Samco Securities and access the Samco trading app, along with all its advanced trading features and analytics, absolutely free of cost. This way, you can keep pace with the market movements despite the festivities of the season and never miss a trading opportunity again.
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