Stock market trading is driven by only two factors fear and
greed. Trading is a pure speculation of the price in a very short span of time.
One has to be a master in this art and should follow strict rules to remain
profitable. India is a country of festivals, almost every month there is some
festival being celebrated in some part of the country. But there are several
festival which is celebrated in larger part of the country like Holi, Diwali,
and Durga puja. All these seasons sees a drop in numbers of retail traders.
Indian market is largely driven by FIIs and one of the major
festival for them is Christmas clubbed with New Year celebration. So around
this time market liquidity gets reduced and volatility in market also sees a
drop. One thing which can not be ruled out is that before the starting of every
festive season we can expect a profit booking approach
from Institutional investors as well as from retail investors. There is a cycle
which is repeated on yearly basis and buying and selling definitely gets
impacted by festive season.
Budget which is not a traditional festival which is celebrated
but for market it is a great event and we categorize budget also as a festival
for market. Market had always reacted on either side after this event. A
tendency of buying before budget is very common in investors so a surge in
volume and liquidity can be viewed before this event.
For any retail traders liquidity and volume is not of a great
concern because they are not trading is such quantity which require huge volume
and liquidity in the market. So it is not a wise decision to stop doing trading
around festivals and again restart after that. But we Indians are very much
traditional about everything and festivals are of great value for everyone in
this country. Several mythological view is also attached with trading as we do Muhurat trading on Diwali which
replicates that we are starting something new after remembering goddess Laxmi.
Festivals has their own importance and trading has it’s own but
it goes hand in hand with retail investors.
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