Why traders lose situational awareness

This problem often arises among novice traders who are faced with changes in market conditions for the first time. What does this mean?

How the mistake shows up in trading

They continue to trade as they do during strong uptrends during periods of economic or political instability and downtrends. This in turn leads to significant drawdowns or even exit from the market.

How to regain control

1. Review the assets being traded every day. Learn to determine whether they are in a state of accumulation or distribution.
2. Determine what market state the asset price is in: breakdown, correction, consolidation
3.  Adapt to market conditions – Learn to recognize whether the market is in an uptrend, a downtrend, or a pullback and adjust your strategy accordingly.
4. Form a set of rules for action at each stage of the cycle, which you will use in accordance with the market situation.
5.  Learn the market cycle system.
6. In case of abnormal situations, shocks, black swans – analyze the historical data of the asset, how it responded to similar crises in the past.