Muhurat Trading: A 20-Year Snapshot, a Practical Playbook

Shubh Diwali & Happy Samvat! Every year, in that one special hour, India’s markets stop being just a screen of quotes and turn into a ritual—offerings are made, books (and hearts) are opened, and a new trading year begins. This note distills what two decades of Muhurat Trading whisper to the disciplined intraday trader: the bias is positive, the window is short, liquidity is quirky—so trade clean, trade small, and let the winners breathe.

What the last 20 years are telling us

• Average return: ≈ +0.6% per session (very close to the ~+0.5% average many 10-year roundups document).

• Hit rate: ≈ 80% positive closes (in most 10-year studies: 8 up / 2 down). Your 20-year snapshot aligns with the same ballpark.

• Best year: 2008: +5.86% on the Sensex—an outlier spike in a crisis year.

• Diwali 2024 (Samvat 2081): Nifty +0.41%; Sensex +0.42% (+335 pts); Autos led; all sectors green.

• Usual leaders lately: Auto, Banking, IT; post-2020, Metals/PSUs often active. (Examples: Autos led 2024; PSU/Metals frequently feature in recent roundups.)

The festive skew is real enough to respect—but not to worship. The average gain is modest, the dispersion is tight, and outliers (like 2008) are rare.

Why this hour “leans positive”

1. Sentiment & symbolism. Muhurat is the ceremonial open of the new Samvat year; flows are often “token” yet optimistic (Lakshmi Pujan, new ledgers, first buy).

2. Microstructure. The session is short; many participants place pre-planned buys; dealers avoid big risk; market makers keep spreads slightly wider—so drift can be one-way if breadth is aligned.

3. Recency checks. Across the most recent decade, multiple outlets peg the average Muhurat gain around 0.5–0.53% with approximately 80% up closes. That’s a gentle tailwind, not a guarantee.

Sector tendencies you can lean on (without overbelieving)

• Auto: Regularly features among top gainers in festive windows (2024 led; seasonally buoyed by sales prints).

• Banks/Financials: Often participate strongly; many pre-Muhurat previews overweight high-quality banks.

• IT: Has showed up repeatedly among leaders in past Muhurat recaps.

• Metals/PSUs: Post-2020 narratives frequently highlight PSU/Metals traction around Diwali and in the subsequent weeks.

Caution: Leadership rotates year to year—treat the above as tilts, not truths. Confirm on the day with breadth (A/D), sector heatmaps, and opening range behavior.

The Muhurat Micro-Playbook (what to do in 60–90 minutes)

1) Pre-session (20–30 minutes before)

• Shortlist 8–12 liquid names from Auto, top private/PSU banks, and one IT heavyweight. Add one Metals/PSU basket if tape is risk-on.

• Mark levels: prior day high/low, pre-open indicative price, and Opening Range (first 5 minutes).

• System switches on:

  • Trend filter: ADX(14) > 10 (or 12) on the 1-minute/3-minute for your chosen names.

  • Bias filter: NIFTY breadth > 60% advancing in the first five minutes; Bank Nifty green if you plan to lean into financials.

  • Spread check: If spreads widen > normal, halve size.

2) The two cleanest intraday structures

A. Opening Range Breakout (ORB), “Trade the clean one”

• Define OR (first 5 minutes).

• Entry: break of OR high (long) or OR low (short) with confluence (VWAP reclaim for longs / VWAP loss for shorts).

• Invalidation: back inside OR by more than 0.25× ATR(14, 1-min).

• Stop: below last swing (longs) or above it (shorts); never wider than 0.5× instrument’s 1-min ATR(14).

• Trail: bar-by-bar behind a 3-min EMA20/34 (a simple momentum backbone in a short session).

B. Retest-and-Go (VWAP + EMA34)

• Let price break level → pull back to VWAP / EMA34 → show stall + higher low (long) or lower high (short).

• Entry trigger: through the trigger bar’s high/low.

• Stop: under/over the setup bar; same 0.5× ATR sanity cap.

• Add: only once, on the next higher low / lower high, or not at all.

The goal is quality over quantity. In one hour, one A-grade trade beats three B-grades.

3) Position sizing & risk

• Muhurat spreads can be quirky; size down 25–50% versus your regular intraday size.

• 1R rule: risk a fixed amount per trade (e.g., ₹X per setup). Two losers end the day.

• Partial exits: book 50% at +1R, trail the rest; let the winner run to the hour’s close.

4) Tape-reading shortcuts

• Sector confirms: If Auto/Banking/IT lead and NIFTY + BANK NIFTY are both green above VWAP, the long side has alignment.

• Breadth flips: If advance/decline flips below 50% and the indices lose VWAP, pause new longs—this session can “drift” both ways quickly.

• Avoid illiquid midcaps unless they’re in your preplan and have normal spreads.

“Festive bias” is not a free lunch—how the data fits the discipline

Multiple recent studies cluster around ~0.5–0.53% average gains and ~80% positive closes across the last decade; your 20-year scorecard (~0.6%, ~80%) is directionally consistent. That’s a soft edge, not a magic trick. The 2008 +5.86% spike is precisely why we control risk: outliers do happen, but you don’t build a process on the exception.

Post-session carry: how to turn one hour into one year

• Notebook the leaders. If Autos led (as in 2024), tag the strongest patterns for first-week-of-Samvat follow-through.

• PSU/Metals watchlist. Historical notes suggest elevated odds of PSU banks / Metals continuing momentum in the week or month after Muhurat. Don’t chase—plan pullback buys.

• Build the Samvat map. Pick 10 core names (5 large-caps, 3 sectors you trust, 2 tactical plays). Stick to them for 30–60 days; depth beats breadth.

Quick reference: rules I actually use on Muhurat

1. One A-setup or none. If the first trade is B-grade, I pass.

2. VWAP is the judge. Trailing on the right side of VWAP + EMA34 keeps me honest.

3. Half size, full discipline. Thin tape exaggerates mistakes; I pre-commit to smaller size.

4. +1R partial, trail the rest. Let the market gift you the seasonal drift if it appears.

5. Close the book when the bell rings. No revenge trading after the session.

2024 in one frame (so you can feel the tape) - On November 1, 2024, the Muhurat session opened firm and closed higher: Sensex +0.42% (+335 pts), Nifty +0.41%. Autos led (monthly sales tailwind), and all sectoral indices finished green. That’s the textbook festive drift—small, broad, tradeable.

A word on faith, flow, and responsibility

Muhurat is auspicious, yes. It’s also an hour of real risk—spreads widen, emotions run high, FOMO is strong. Respect the tradition, but execute like a professional:

• Plan the trade, trade the plan, stop the loss.

• Journal the day: what confirmed your bias? what invalidated it?

• Let your winners run—the festive drift is small but persistent when breadth aligns.

Shubh Diwali & Happy Samvat!

— Sagar Chaudhary

Disclaimer: Markets involve risk. Historical tendencies are not guarantees. This article is educational and not investment advice.