4.0 Observing Object Conversion - Observing Self (1)

As of now, the articles focus on the things outside the trader's own: concepts, propositions, strategies, and so on. These contents are all about how traders observe and summarize things outside of themselves. It is also worth noting that traders have a clear commonality: they do not involve discussion of thinking or actors, that is, they do not discuss the people and groups involved.

The process of making choices and value judgments for external things involves how people gain experience and use experience.

The first step in people's experience comes first from the observation of nature. In the observation of nature, human beings find that objects that can be observed by humans for a long time must have laws. This is also called "Natural is also inevitable".

With the deepening and summarization of observing natural things, human beings have gradually acquired the ability to adapt and transform the natural world. The experience that human beings will gain in this process forms certain theorems, and the habits and culture of thought gradually form, making more and more external information clear. People are nervous when they are faced with uncertainty. Only by mastering these phenomena and being able to use or modify these phenomena will they be relieved of tension. For example, through the transformation of the four seasons of spring, summer, autumn and winter, human beings can obtain certain factors and arrange labor and rest, so that the society can be stable and long-term development.

As human development progresses, observable things become huge and complex. These observable things include:

• Human participation and non-participation will not affect the occurrence of things (such as spring, summer, autumn and winter);
• Human participation does not affect the occurrence of things, but participation will change the situation of things (such as dredging the river and benefiting from flooding);
• There is another type of thing that does not happen if humans don't participate (such as financial transactions).

(To be continued...)

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3.7 Discussion on "learning" and "thinking"

The formulation of a trading strategy is based on the trader's learning and thinking. Different traders focus on these two aspects, and even some traders focus too much on one aspect, so that they produce deviations that they have never noticed.

• Too much focus on learning

The process of self-growth of any trader can't be separated from the experience of learning from predecessors and others. This approach and process makes it necessary for learners to be influenced by historical experience.

There are countless established trading strategies in history. If each strategy is a "good strategy" for a specific individual trader, then not many people in the real trading environment are in anxiety and annoyance. Therefore, when a trader faces the summary of others, it is necessary to constantly ask a question. Is this strategy really a "good strategy"? If it is really a "good strategy", is this strategy suitable for me? If I think this is a good strategy, should I use the test method to verify?

In the actual trading environment, few traders verify the established trading strategies in history, and even some traders use a strategy that they see or hear as the only standard without any verification. Used, but most of the results are not satisfactory, and even bring great risks.

• Too much thinking

Some traders, after having some knowledge related to financial transactions, then spend almost all their energy on "thinking", thinking about how trading strategies are built, thinking about how to quickly capture opportunities, thinking about what might happen next, etc. .

Everyone at work or in life wants to be recognized for their own value (or from the outside world or from themselves), which is no exception in trader development trading strategies. When a "too much thinking" trader independently develops a trading strategy, because the strategy is developed independently by the trader, and the trader has already learned the other knowledge, this makes the trader in the strategy test or In practice, the strategy is more likely to have a repulsive psychology that ignores certain phenomena that are contrary to the expectations of the strategy in testing or practice, or from some explanation to convince me that the strategy is still valid.

Traders need to treat the "learning" and "thinking" aspects in a balanced manner, so that the established strategy is in an "open" and "rigorous" environment, which is conducive to further improvement of the strategy.

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3.6.2 Suggestions on establishing a trading strategy (2)

End with a "relatively good" strategy

After the trader removes the "not good strategy", there will be some good strategies left behind with the culling strategy. Traders need to make trade-offs to settle their relatively good strategies to meet their investment requirements. However, many traders are not satisfied with this and hope to find a better or even "perfect" trading strategy.

But as discussed at the beginning of this chapter (see 3.1.1), no single strategy is flawless, because a flawless strategy can make assets expand and produce amazing results. This phenomenon has not been seen in the real trading environment.

A strategy of pursuing perfection can cause damage to traders. This sentence sounds a bit unreasonable, but it is true because:

• When a trader develops a so-called "perfect" strategy, the strategy is revisited in the event of an undesirable effect in the process of testing with historical data of selectable multiple samples. Once the strategy is revised, it needs to be re-verified. Repeating this way may result in a huge amount of work and consume a lot of time and effort of the trader.
• Once a "perfect" strategy has been put into practice through the test of multiple sample historical data, and the subsequent reality is very likely to make the strategy invalid at some point in time, the trader needs to be revised. Strategy and test to meet the "perfect" needs. This may once again create a massive amount of work, continuing to consume a lot of time and effort on the trader.

Therefore, once a trader has worked hard to develop a "perfect" strategy, this means that the trader always reminds himself that he may spend the same hard time modifying the strategy at any time in the future.

If a trader changes the demanding requirements of the “strategy” and can accept the “strategy” to some extent, then the tested strategy will not let the trader be in a state of tension to modify the strategy.

This is what this article calls a "relatively good" strategy.

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3.6.1 Suggestions on establishing a trading strategy (1)

Every trader wants to establish their own personalized trading strategy, so the established trading strategy will vary from person to person, and the difference between these trading strategies is bigger or smaller. For example, two traders are based on MACD to establish their own trading strategy. If the parameters adopted by the two people are different, then the difference is very small; if one trader adopts the trading strategy of MACD technology analysis and another trade Using the fundamentals of financial indicators to analyze trading strategies, the difference between the two trading strategies is large.

Therefore, this article can not give a detailed discussion on the specific content of the trading strategy, and can only discuss the starting point and purpose of the entire trading strategy.

Thinking from a "not good strategy"

The so-called "not good strategy" means that when a trader chooses a specific strategy, the strategy is not suitable for the trader.

“Good” and “not good” are relative concepts. Different traders, investment ideas and investment plans will make the same strategy produce different value judgments between different traders.

When traders develop their own trading strategies, they generally prefer to start thinking from the perspective of “good strategy”, and when considering this purpose, they unconsciously hope that this “good strategy” can “completely” avoid various kinds. risk. Thinking for this purpose is risky for most traders. At the beginning of this chapter, we explored that this strategy is not universal, but most traders will believe that they have the ability to master a "good strategy" that others cannot master. This has caused many traders to fall into this category--the "good strategy" of "completely" avoiding risks is in pursuit.

Once a trader is caught in a “good strategy” pursuit of “completely” avoiding risk, it will cause some harm to the trader:

• When the strategy is effective at a certain stage, the trader will downplay the risk control, which makes the trader forget the discipline in the use of funds;
• When the strategy fails at a certain stage, the trader will be confused, which makes the funds slowly lose the security barrier;
• When the strategy fails for a long time, the trader will fall into pain, which makes the rational analysis and independent thinking disappear;
• When the strategy fails for a longer period of time, the trader pays more time for this.

If the trader changes the starting point of the trading strategy and starts to study from the "not good strategy", this stage can not get the active guidance of the action, but it can produce another effect: let yourself realize that in many cases You should not behave arrogantly.

From the negative way as a starting point for thinking, traders can effectively isolate themselves from “not good” strategies. For example, when a trader prepares a portion of the funds to trade in financial products, he has begun to give the business a "long-lasting good" vision in the depths of the trader's consciousness. But once the funds are ready for the transaction, some "strategies" are inadvertently pushed to the traders - for example, "the average price on the 10th goes from falling to buying, and the average price on the 10th is changed from rising to falling." Such a strategy. Once the trader begins to feel that the strategy is effective, then the investable variety will come one after another. As traders continue to buy, they suddenly find that their funds are not enough, and they are quickly occupied by a large number of trading products, and then continue to emerge. The exhaustion of funds in a short period of time contrasts with the vision of “long-term beauty”. On the one hand, traders will give unrealistic wishes to the currently traded varieties, and on the other hand, short-term quick actions will disrupt long-term planning.

When traders start with long-term planning, once they encounter short-term strategies, it is probably a good strategy to consider this strategy first, but for their long-term plans, this is a "not good strategy" and should be avoided. use.

This way of thinking about the starting point can be a good protection for traders.

For example, the following ways of thinking:

• Don't buy stocks that have a record high (although it's tempting and may even be more attractive in the future).
• Don't buy stocks that have a record low (although it's cheap, maybe it's cheaper in the future).
• Don't buy stocks that are losing money (although the market reports that it will turn losses, but it is not true after all).
• Don't buy stocks that haven't paid dividends for many years (although it's good, but it's not for shareholders).
• The price breaks through the xx day pressure line and does not buy (although the price has broken through, the long-term investment behavior is not based on the price breakthrough on a certain day)
• ...

This way of thinking will make traders feel that certain conditions constrain their own transactions, but it is these constraints that effectively protect traders in many cases.

(to be continued...)

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3.5 Example of the inspection process

The following is an example of a strategy check for a virtual company: Lido Machinery.

• Sample: Lido Machinery (virtual)
• Trading strategy: buy when MACD>0, sell when MACD<0
• Sample data time period: 2017 (limited to the length of the article, the sample only collects one year of transaction data, in actual applications, the trader will take a longer period of time)

During this period, Lido Machinery's stock price fluctuations and MACD changes are shown below.

Its sample data (too much data, only partial data is shown here) as shown below:

After the data is collected, the trader uses the MACD data near the closing time as the basis for buying and selling. After the data is sorted out, the time points for buying and selling are judged by the self-programming rules, as shown in the following figure:

In the "Operation" column, the calculation and judgment function of the spreadsheet software automatically obtains the time period during which the trading strategy needs to be operated.

On this basis, through the simulation operation, the comprehensive changes of funds at various stages are obtained, and the investment results of the strategy in 2017 on the sample of Lido Machinery are obtained. As shown below (too much data, only partial data is shown here):

As can be seen in the above figure, the trader can track the change of the simulated assets by adding a field similar to “Funds” to understand the actual application effect of the strategy.

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3.4 Main tools for data inspection

Once the strategy has been developed and the eligible sample data is obtained, the next step is to test whether the strategy is feasible. Regardless of the strategy, what needs to be tested is whether there is revenue around the stage of buying to selling (of course, it may be the stage of selling first and then buying, which usually happens in futures trading).

If the trader relies on manual calculation of the trading process at this time, there will be a problem of "calculation is accurate". This is because when a trader is faced with a large amount of data, it is inevitable that misreading numbers, misplaced decimal points, missing calculations, and improper use of arithmetic rules. For the operation of a large amount of data, the most appropriate method is to complete the computer, which not only ensures the reliability of the data calculation, but also can be quickly calculated by the fast tuning of the strategy.

Testing data through computers presents another problem for traders: they need to be proficient in software that can calculate large amounts of data.

Individual traders generally do not use very specialized software such as databases when processing data because this type of software is too complex and difficult to master for individual traders. The corresponding spreadsheet software is the most suitable tool for personal traders to analyze data. For example, Excel, Numbers and Calc are all spreadsheet software.

In addition to being familiar with the operation of the software, traders need to be familiar with basic arithmetic rules and some logical judgment rules in order to automate the analysis and processing of sample data.

For example, a strategy: when the price-earnings ratio is between 15 and 25 and the MACD is greater than 0, it is bought. Such a sentence may be expressed in a spreadsheet similar to the following:

"PE between 15 and 25" AND "MACD>0"

Let's take a look at the inspection process through an example.

(to be continued)

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3.3.3 Inspection strategy (3)

(... continued)

Strategy biased towards technical analysis

When traders have developed a strategy that favors technical analysis, they also face problems similar to those of “strategies that favor fundamental analysis”. It's just that the details are different.

When a trader develops a strategy that favors technical analysis, the first problem that needs to be addressed is how to easily find the eligible data from the historical data of the sample.

Here we assume that the trader's strategy is: the 10-day average price moves from the downtrend to the buy-in time point, and the 10-day average price shifts from the rise to the fall when it is the sell time.

When a trader browses the relevant historical data of Lido Machinery (the company virtualized in this article), it will encounter a large number of data that meets the condition during the stock price fluctuation process of the company, and the data appears to have no time regularity. Therefore, it is necessary to pick the investment process one by one, or to interpret the investment process through rigorous data operations. This is a very sophisticated and complicated work, and its workload is relatively large.

Secondly, the strategy biased towards technical analysis will also encounter a second problem similar to the fundamental analysis, which is the question of how many samples are needed for historical data testing.

For example, if the strategy based on technical analysis is applied to all publicly traded stocks of NYSE, then the basic data may be more than billion . If further calculations are made, then the total The amount of data is amazing. The data is put into the rules of the strategy to test, the difficulty level and workload can be imagined. Although this test method is the most comprehensive and accurate, no individual will pay for it.

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3.3.2 Inspection strategy (2)

(... continued)

When a trader browses the historical data of Lido Machinery (the virtual company of this article), it will be more convenient to find out at which stage the stock has a P/E ratio between 15 and 25. Since this data is generally reflected in the company's financial reports, it is necessary to look at the financial reports for the past quarter, half year and full year for several years. This work is very laborious and time consuming. After finding the eligible data in a large number of reports, it is necessary to link the data to the price fluctuations of the stock, which is a very time-consuming and laborious task.

Another issue that traders need to address is how much the sample size for historical data testing should be appropriate.

There are two extremes in the choice of sample size: one is to select the largest number of samples as much as possible; the other is to select only one or two samples. By describing the pros and cons of the two extreme conditions, traders can better grasp the appropriate workload.

As many samples as possible will make the trading strategy fully tested by historical data, but its workload is very difficult for individuals. Think about it, if independent traders face financial reports from more than 3,000 listed companies for several years, this will be a huge workload. Even if there is perseverance to collect these reports and test them, the market and many stocks may have changed a lot.

If the sample is only selected one or two, although it will be very easy to pass the historical data test, it is only a great chance that the test results can prove the universality and reliability of the strategy.

(to be continued)

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3.3.1 Inspection strategy（1）

Many traders seldom go through detailed historical tests after developing strategies.Although the facts of history cannot verify the accuracy of the strategy in the future, after a strategy is formulated, if it cannot be tested in the fact that history has already occurred, then the starting point of this strategy is likely to have major problems.

For traders who have a good trading strategy, their trading strategies are either biased towards using fundamental analysis or biased towards technical analysis. Traders who can integrate the two in a complete strategy need a comprehensive knowledge structure, logical reasoning and patient testing, so such traders are relatively few.

The strategies brought about by fundamental analysis and technical analysis will give traders different difficulties in testing historical data.

• Strategy biased towards fundamental analysis

When a trader develops a strategy that favors fundamental analysis, traders need to use a large number of samples to test historical data. This is a cumbersome process that makes most traders unwilling or unsure of how to proceed.

When traders use historical data to test their trading strategies based on fundamental analysis, the first problem that needs to be addressed is how to easily find qualified samples from historical data. The following is an example.

Here we assume that the trader's strategy is that stocks with a P/E ratio between 15 and 25 are worth investing in.

To be continued.

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3.2 Inappropriate goals - perfect trading strategy (2)

Next, compare the market volatility with the asset volatility as the following figure to further observe the effect of the strategy.

From the above graphical comparison we see the following result: the trader's assets have risen sharply. As far as the fluctuation of assets is compared with the index, there is almost no fluctuation in the index.

When traders successfully develop a “sustainable profitability” trading strategy, the changes in their assets are staggering. Its assets have grown more than 220 times in 18 years or so, which is an extremely tempting result. But in fact, traders have not seen this phenomenon happening frequently, which explains from another angle that such a strategy is not universal even if it exists.

What traders must reflect is whether it is appropriate to aim for a “sustainable profitability” strategy that is not universal.

As for the purpose of the strategy, each trader will give a different answer. Here we only point out that "sustainable profitability" is the purpose, the possibility of realization is very small, there is no universality.

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3.1 Inappropriate goals - perfect trading strategy (1)

Traders need to consider what the final trading strategy they want to achieve before establishing their own trading system. This is an obvious but little thought for the trader.

For example, when you ask a trader what his trading strategy hopes to achieve, the content of the answer is often similar to the words “make my own assets add value”

This sentence is very exciting, but it is also very worrying. This is because such a statement has deviated from the actual situation and turned into a sentence similar to ideal. Below we make a brief description based on the actual data of the market, combined with the virtual example.

Time: The end of 1999.
Trader: A
Research results: Successfully develop and establish a trading strategy – the result is a constant increase in assets.

According to the research results of Trader A, the strategy developed will guide the trader's specific trading behavior and increase the value of A's assets. If the strategy causes a large loss in the asset (a small range of losses, we temporarily believe that the strategy is still valid) then it does not meet the purpose of the strategy, and will not become the research results of Trader A.

In early 2000, Trader A began using this "successful" strategy. Because the strategy is successful, when the securities market is in the process of decline, Trader A's funds will not have a large loss, and in the process of market rise, Trader A's funds should rise.

What effect will it have since the implementation of the strategy in 2000 until 2018? The chart below shows the fluctuations of the Shanghai Composite Index(China)  during this period:

Through data collation, we organize the larger range of cycles that the strategy can use as follows:

The income generated by the investment during this period is organized as follows:

	Investment start and end time	Percentage of revenue	Simulated funding changes
0	1999-End of year- Strategic research success		10,000.00
1	2000/1/Mid-term——2001/6/Mid-term	≈ 57%	15,700.00
2	2002/1/Late——2002/7/Early	≈ 24%	19,468.00
3	2003/1/Early——2003/6/Mid-term	≈ 16%	22,583.00
4	2003/11/Late——2004/4/Early	≈ 33%	30,035.00
5	2005/7/Late——2005/9/Late	≈ 19%	35,742.00
6	2005/12/Early——2007/10/Mid-term	≈ 470%	203,729.00
7	2009/1/Early——2009/8/Early	≈ 83%	372,824.00
8	2010/7/Late——2010/11/Early	≈ 24%	462,302.00
9	2012/12/Early——2013/2/Mid-term	≈ 20%	554,762.00
10	2014/7/Mid-term——2015/6/Mid-term	≈ 153%	1,403,548.00
11	2015/10/Early——2015/12/Late	≈ 18%	1,656,187.00
12	2016/6/Late——2017/4/Mid-term	≈ 13%	1,871,491.00

As can be seen from the above table, such a strategy has amazing effects. But is it actually the case?

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3.0 How to invest in financial products?

The question of how to invest in financial products varies from person to person in thousands of ways. But regardless of its content, it tries to achieve results similar to the following:

Traders often refer to the method of how they invest in “strategy”. The research and establishment of strategies has become the main content of how to invest in financial products.

Investment strategies often contain something like the following:

Each small strategy contains: several concepts, logical judgments between concepts and concepts. The accurate understanding of concepts and the proper application of logical judgments form the basis of an effective strategy.

For clarification concepts and logical judgments, this series of blogs has been briefly described and discussed, and the following content will be developed for strategy.

[Thinking] Can traders clearly describe their investment strategies? Is the description of the statement logically expressed?

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2.1.8 Preliminary discussion on "Syllogism" (2)

One of the common problems that traders may encounter in common: when reading research reports, news, and information, traders think that "Major premise" is correct, and therefore accept the conclusion and take action based on the conclusion. This may involve trading risks but not aware of them.

The following is the analysis information given on the virtual "Lido Machinery Company". We use this as an example to make a general discussion of people's thinking habits.

Recently, the stock of Lido Machinery Co., Ltd. (the virtual company of this article) continued to rise, and the driving force for the rise in stock prices came from the good fundamentals of the three quarterly reports.

When a trader sees similar text, the trader can easily translate the sentence into a "good fundamentals" stock that will cause the stock price to "continue to rise." Now we turn this sentence into a more explicit A proposition expression below, and use the syllogism to simulate possible thinking processes.

The trader will unconsciously perform some conversions in the above sentence.

Lido Machinery's good fundamentals of three quarterly  are the driving force for the  rise in Lido Machinery's stock prices.

Then this sentence will be transformed into another unconscious conversion (without the word "Lido Machinery"):

Good fundamentals of three quarterly  are the driving force for the  rise in stock prices.  (Major premise)

Next, expand the inference below.

The fundamentals of three quarterly of Fuyun Ore (this company's virtual company) are good. (Minor premise)


The fundamentals of three quarterly of Fuyun Ore are good for the rise in Fuyun Ore stock prices. (Conclusion)

According to this conclusion, traders may buy shares in Fuyun Ore Company.

In fact, at this time, the trader should review the article's discussion of the A proposition. At this time, it is clear that the "The fundamentals of three quarterly are good " is only one of the full powers of the stock price increase.

With this understanding, when traders face the trade of Fuyun Ore stocks, they will not only decide their own behavior from the condition that the fundamentals are good in the third quarter.

However, even with such an obvious way of thinking, many traders will give up. The reason is that the next step in finding other reasons for stocks to rise will cause traders to fall into the search for “uncertain” information. Most traders prefer to accept isolated "certain" information.

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2.1.7 Preliminary discussion on "Syllogism" (1)

Syllogism is a commonly used inference method in people's daily life. This inference method involves the following three parts.

• Major premise
• Minor premise
• Conclusion

The discussion of syllogism can go deep into complex graphical methods, but here we only do some general discussion. If traders are interested in the in-depth content of syllogism, they can study the relevant knowledge of logic.

In order to understand some of the ways in which syllogism is used everyday, we present a simple example here.

• Major premise: Cattle is herbivore.
• Minor premise:The water buffalo is the cattle.
• Conclusion:The water buffalo is herbivore.

In daily life, people often use similar inference methods to judge things.

Traders often think in a similar way also, for example (the following is an example of a virtual “Lido Machinery” company stock):

• Stocks with low P/E ratios are stocks with low risk.
• Lido Machinery is a stock with a low P/E ratio.
• Lido Machinery is a stock with low risk.

This kind of inference seems reasonable, but in practical applications, many traders feel that they always make frequent mistakes. why?

Readers delve into the above two examples, and they will find a very interesting but serious problem, that is, the "major premise" as a proposition indicates a certain situation, but whether this situation is realistic or not, people generally do not go think deeply.

This is what was mentioned in the previous discussion of the proposition: the proposition is only responsible for whether the sentence itself conforms to a certain rule. Whether this proposition is realistic or not, it is not required.

[Thinking] In the usual way of thinking and judging, do you accept the conclusions of the "major premise" unconsciously?

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2.1.6 Some ambiguities in the daily use of "is" and "is not"

In the four daily judgments (propositions) (a-type, i-type, e-type, o-type), the words "is" and "is not" are used for affirmation and negation.If you think deeply about these two sets of words, you will find that these two sets of words are widely used in daily life and can easily cause ambiguity.

The "is" is a daily use vocabulary if it is indicated by a mathematical symbol that the "=" symbol should be used.If the word "is" is used in accordance with such a rule, the word "is" is basically useless except for mathematical expressions and some abstract forms of logical expressions. (This is because in the material or real world, no two things are exactly the same.) In the case of many daily constants, the concept of "is" should strictly be "belonging".

E.g.

NASDAQ stocks are publicly traded stocks in the United States.

This sentence should be strictly stated as:

NASDAQ stocks belong publicly traded stocks in the United States.

When using the term "is" to connect two different concepts, readers should always remember that no two things are exactly the same.

There is another situation, that is, even if the same concept cannot be linked with "=" at different points in history over time.

Please review the map of the Dow Jones Industrial Index mentioned in the series "1.1.5.2 Changes in sample stocks and stock index distortion":

As for the word "is not", if you go deeper, the meaning behind it in daily use is mostly a concept of "not belonging". The word "is not" is not as ambiguous as "is", because when the concept of "not belonging" is established, "is not" is also established. It’s just that everyone doesn’t delve into their true intentions in everyday language.

E.g:

Some blue chips are not the DJIA index stocks.

The meaning can also be "some blue chips do not belong to the DJIA index stocks."

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2.1.5 Comparison of four judgments (propositions)

In the above picture, the two forms of universal and particular of the concept of NASDAQ stock are used, and then four sentences are formed for their affirmation and negation. Give each sentence a picture for understanding.

Among these four propositions, some propositions can be derived from each other to derive another proposition. See the table below for details.

Proposition type	Other proposition types that can be derived	Example
A	E	NASDAQ stocks are publicly traded stocks in the United States. Some publicly traded stocks in the United States are NASDAQ stocks.
I	I	Some NASDAQ stocks are index stocks of the Nasdaq 100 Index. Some index stocks of the Nasdaq 100 Index are NASDAQ stocks. （Although this sentence does not meet the usual language habits, it is still established.）
E	E	NASDAQ stocks are not publicly traded stocks in the NYSE. Publicly traded stocks in the NYSE are not NASDAQ stocks.

It should be noted that O propositions cannot derive O propositions. For example, the following two sets of sentences are compared.

The first set of sentences is as follows:

• Some NASDAQ100 index stocks are not blue chips. (Original O proposition)
• Some blue chips are not NASDAQ100 index stocks. (The derived O proposition is established)

The second set of sentences:

• Some NASDAQ stocks are not index stocks of the NASDAQ100 index. (Original O proposition)
• Some NASDAQ100 index stocks are not NASDAQ stocks. (The derived O proposition cannot be established)

It can be seen from the second set of sentences that the O proposition cannot derive the O proposition.

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2.1.4 O-type: Particular and negative

In the O-type statement, the subject is "partial" and the predicate is "negative". For example, the following sentence:

Some flower color is not purple.
Some birds are not migratory birds.
Some first middle school teachers are not excellent teachers.
Some stocks traded in the New York Stock Exchange are not S&P 500 index stocks.

The O-type statement and the E-type statement have little difference in the impression people have on everyday use. Therefore, O-type statements are rarely used by authors to avoid doubts about the author's ability.

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2.1.3 E-type of propositions: Universal and negative

E-type refers to the two concepts in the establishment of "no" logical relationship, the coverage of the previous concept is all, the coverage of the latter concept is all.

A is not C.

A:all, C:all.

For example, the following sentence:

Pine trees are not broad-leaved trees.
White horse is not a dark horse.
Zhang San is not a good person.
Indicator stocks are not stocks that have just been listed.

The tone of E-type also has a firm attitude, but the e-type statement rarely leaves a guiding role for action for people's actions.

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2.1.2 I-type of propositions: Particular and affirmative

I-type refers to the two concepts in the establishment of "yes" logical relationship, the coverage of the previous concept is part, the coverage of the latter concept is partial.

e.g.
Some A is C.

A is particular.

For example, the following sentence:

Some pine trees are curved.
Some birds are very large.
Some students are working hard.
Some indicator stocks are blue chip stocks.

The i-type statement is often found in rigorous articles. The writer avoids using the a-type statement, in order to avoid that once any special case occurs, the a-type statement cannot be established.

For example, in the face of the central bank's downward adjustment of deposit reserve, the tone of a-type will express the statement that “the reduction of the deposit reserve ratio will bring sufficient funds to the market and the market will rise.” The tone of i-type will be expressed in a less firm way. "The reduction in the deposit reserve ratio will bring sufficient funds to the market, and the market may rise."

Just the i-type statement requires the reader to think further, and when the reader unconsciously resists independent thinking, then the reader will feel that these words sound "ambiguous" unattractive.

[Thinking] When you are faced with a message or news, you want to think about it again, or you want to see the clear point that the other person gives?

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2.1.1 A-type of propositions: Universal and affirmative

 A-type refers to the fact that when the two concepts establish a logical relationship of "yes", the coverage of the previous concept is all , and the coverage of the latter concept is partial .

E.g.

A is C.
A is all, C is not all (partial).

For example, the following sentence:

Pine is a tree.
White horse is a horse.
John is a good person.
Indicator stocks are good stocks.

The A-type statement is the sentence that people like to use most, because this statement can express the firm attitude of the speaker. At the same time, listeners also like to hear such statements, because such statements are "certain" for most people, no need to think. Most people do not intend to accept "uncertain" statements.

For example, when a trader sees an article, its content expresses the recent stock market trend is difficult to grasp, it needs patience to observe for a while to determine; and another article, its content expresses the recent market has confirmed the bottom, can Buy with confidence.

Traders generally prefer the latter's article because this article expresses the concept of "certain"; the former article trader generally thinks that there is no guiding significance, and even himself can draw such a conclusion.

Although the A-type statement sounds like a firm idea and concrete actions that may arise from it, people should clearly understand that the development of anything is complex and changeable. At a certain point in time, facing the development of things with a completely "affirmative" attitude is often hurt, especially in the field of financial investment.

Think about it, many traders often say, “When I buy stocks, the price will fall. When I sell stocks, the price will rise.” Isn’t it just a denial of A-type expression?

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