When trading, we can be our own worst enemy. I have seen traders and brokers so caught up in the story and the belief that a stock will go higher, that they refuse to see evidence to the contrary. Being wrong stings the ego, and we never want to admit it. I find it best to detach emotion from my trading. Stick to the technicals and be flexible so that we can avoid major losses. Once the trade is closed, we look back to see what may have gone wrong? What have we over looked that may have foreshadowed this turn of events? That way we can learn from our mistakes as we move forward.
Dow Jones close 7 July 2013
In this situation, the clues are not within the Equinix chart itself. Rather, it was in the market as a whole. Looking at the Dow, we see it is struggling against resistance and may be heading for a small pull back. We were buying at the peaks of the market.
Why should the Dow matter? It is an indication of what the overall market is doing. I understand that all stocks do not pull back in tandem with the indexes; however, I do believe it is easier to swim with a current as opposed to against it.
The Quantum Option 