#SA FIRST, THEN SETUPS When @PradeepBonde introduced the concept of #SituationalAwareness in trading, he emphasized two critical layers: a) What is the market doing, and what is likely to happen next? b) What does that mean for my trading objectives? Which setups are likely to have a higher probability of working in this environment? Most traders fail to connect these two layers. They may have a view on the market, but they never ask how that view should influence the setups they trade. The core reason is simple, they only know one setup. Every evening, they run the same two or three scans, go through every stock one by one, and try to match each chart against a visual template stored in their memory. Whatever matches gets shortlisted. If nothing matches, they simply sit out. That defeats the whole purpose. This is a technical flaw, and no amount of hard work can compensate for it. Instead, spend five minutes every evening asking yourself: a) What is happening in the market? b) What is the most probable outcome? c) If that outcome unfolds, which setups are most likely to work? Let me explain this with yesterday's example. Step 1 – What is happening in the market? Yesterday evening, the market sold off sharply following renewed Middle East tensions and Trump's comments about potentially cancelling the deal. The news triggered an abrupt decline. Step 2 – What can happen next? Before jumping to possible scenarios, ask yourself one more question: Does this issue still have the ability to significantly impact the market? In my view, the market has already largely discounted this issue. Therefore, the probability is much higher that such news will only trigger occasional knee-jerk reactions rather than a sustained decline. Whatever scenarios we consider should be viewed through this lens. Now, let's get into two broad possibilities: a) TACO - Tough Talks, No Action. The more probable outcome. If the market senses that the rhetoric won't translate into action, it is likely to recover quickly and open higher. b) An actual escalation – A much less probable outcome. It could trigger panic initially, but since this issue has largely lost its ability to exert sustained pressure on the market, even such a sell-off would likely be followed by a reversal. Step 3 – Which setups are most likely to work? Since the thesis is to play for a recovery, the highest-probability opportunities are likely to come from three types of setups: a) Momentum Suppression These are stocks that were showing excellent momentum before the news hit. The sudden market-wide sell-off abruptly interrupted their advance, creating an opportunity. My first priority is these stocks, with the objective of finding a Wick Play entry. If the market opens strong, the probability of a sharp recovery in these names is very high. Examples: #IOLCP, #BALAMINES One important point: don't settle for mediocre setups here. Find the absolute best momentum stocks and focus on those. These are my favorite setups in the event of a strong opening. b) Strong Closings These are the wild ones - stocks that remained largely unfazed by the market sell-off. Their momentum was so strong that even the broader market couldn't make much of a dent. Whether the market opens strong or weak, these can often be traded as D2 entries. A gap-down reversal offers the best risk-reward, as it provides an excellent entry while the underlying strength remains intact. Examples: #UNICHEMLAB, #SGMART c) Extended Declines These are stocks that were already in momentum but experienced a sharp, fast sell-off, leaving them looking stretched on the downside. They can work well in both scenarios. A gap-up open signals immediate recovery, while a market-wide gap-down followed by a reversal can create a powerful slingshot move. Examples: #IKIO, #QUADFUTURES, #HEXAGON, #IXIGO #KERNEX I hope this framework and these examples help you understand how I approach stock selection, especially on days when market conditions and news flow play an important role. Merging Situational Awareness with your setups - or better yet, identifying the SA first and then selecting the appropriate setups - can significantly improve the quality of your trades. Later today, I'll try to upload a video from yesterday's @tradetm_org workshop, where we went through the stock selection and prioritization process in real time. I hope that helps you see the live implementation of the framework explained above.