Being a short term trader, it's sometimes easy to forget about the larger picture. One could argue that short term traders couldn't care less about the larger picture or the long term view, but that's actually not the case. Trading is a game of chances, and as a trader, you make the trades that are likely to be successful. But it is also obvious that even trades that seem very likely to be successful can fail multiple times in a row.
Currently, the Greed and Fear indicator has had 4 days in a row where it made the wrong market call. That happens. In the long run however, the indicator is still a good tool to use. If you have a certain trading method (which you should!) then don't let go of that method if it has let you down on a few occasions. Look at the larger picture and remember how well your favorite tool or method has worked for your situation in the past. Go through your trading journal (which you should have!) and look at the successful trades you've made with that particular method or tool.
For today (March 10th, 2011) the Greed and Fear indicator called for a higher close for the S&P 500, but instead the index sold off making it the 4th failure in a row for the indicator. That's tough to swallow. For short term traders it is an absolute requirement to reset your brain and emotions after a bad trading day and to stay with the plan the next day (this also applies to very profitable trading days). Don't take more risk or bigger trades to compensate for the loss. If anything, trade less and smaller.
It's really the same as with a long term chart. A few down days may suggest the market went into a bear market from one day to the next, but look at the larger picture. Does the daily chart of the S&P 500 below look like a bear market?
Just remember the time..... when we last hit the 50-day moving average. The same applies to thinking about your trading method. Remember what it did after the last time it failed on you. But if it doesn't get back up on to its feet, your tool may indeed have entered 'a bear market '. It will always be a game of chances.
Do you really need to trade: Destructive trading.
Get used to the loss and avoid Conditioning.
Every trade makes you a better trader: There are no losing trades.