Take It Easy

 | Jan 11, 2013 | 2:11 PM EST  | Comments
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On a day like today, one of the easiest things to do is to overtrade. There are quite a few pullbacks and not much energy, so it is very easy to buy and sell just to keep busy. When I can't find many new things to buy or trade, I often find myself selling stocks that are still OK technically just to do something. I justify it by thinking that the action is weak and there is risk of more downside, but often I'd be better off if I had done nothing and waited for real weakness first.

One of the good things about action like this is that it helps charts to set up. We have lighter volume pullbacks to support and we are able to see what has good relative strength or underlying support.

A key element of good trading is to know when not to push it. I have a few things working today like China Lodging Group (HTHT), which I mentioned Thursday, but I feel like I'm trying too hard to make things work when they aren't cooperating. I'm going to heed that feeling and take it easy the rest of the day.

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