His post is about the difference between INVESTING and TRADING. This is a important thing to understand. He defines trading as:
"Trading is about exploiting supply and demand during short-term intervals; it is not investing"
I've been victim to this, I think we all have. I was shorting in early March based on the poor fundamentals of the economy, bogus ideas of stress tests and bank memos that fell out of a tree. I was shorting based on a "investing mindset". What I wasn't realizing was that that market had fallen a considerable amount, NYSI was at a bear market level and turning up, we were oversold, etc etc. In hindsight there was great reason to get long. But my mind was in a "investing mindset", had I remained in a trading mindset, I would've been able to expolit this market.
He sums it up by saying:
There's a time for politics, and there's a time for economics. Just not when you're trading the day timeframe.
One thing Dr. Brett doesn't touch on is when you make a "trade" that you decide will become an "investment". This is where you can lose a lot of money. First thing that is wrong with this is that you have now become attached to your trade and given yourself a rationale to holding the position for a loss or even past your target. Sometimes this does work out but most of the time it doesn't because you entered the trade as a trade, your exceptions were that this would be a trade. The entry for the investment trade may have been 3 points lower, or in 2 months. Once you decide it will be an investment is where a trader will get in trouble. So before you place a trade, make sure you have your edge and your out, other wise it may turn into then an investment. Then you would be a BUY AND HOLD investor and well those people aren't happy right now!
