Abstract
We study a continuous homodyne measurement of the field transmitted from an optical cavity. In particular, we investigate the back-action of this measurement onto an atom whose centre-of-mass motion is entangled with the cavity field. Using the method of quantum trajectories we calculate analytically and numerically the time evolution of the entangled quantum state, and demonstrate the localization of the atom relative to the nodes of the cavity field. We compare the quantum trajectory formalism of the continuous homodyne measurement to a projection onto quadrature eigenstates of the field and show that in the long-time limit both descriptions are identical.