If it is not trivial that it is a tautology, then you can do the calculation of the truth table step by step : ((P => Q) <=> (non P => non Q) ) is a tautology if its truth table gives a full column of 1 (column 4 here) P Q ((P => Q) <=> (non P => non Q) ) 0 0 1 1 1 1 1 0 1 1 1 0 1 1 1 0 0 1 1 0 0 1 1 1 1 0 1 0 If one takes your sentence P = "It doesn't go up" Q = "it goes down" If you want to refer to statistical inference hypothesis the formulation is very different from simplist formulation like the one of a tautology. In statistical inference one defines a null Hypothesis H0 against an hypothesis H1 where H1 is NOT the negation of H0 but an ALTERNATIVE hypothesis to H0. At the end you claim that the quote does require some insight into the way the market works - which you didn't mention at the beginning. All right but if you pretend that at each step the market will chose between up or down well this is just random walk which is worthless since at step 2,3,4 it can be down again after being up at time t so that you will be down. If you pretend that you will let the market decide if it will goes up or down by managing a stop-loss you are talking about trading strategy using a blind approach of market that is to say not much knowledge of market. One can decide to use any kind of strategy that will work or not - that is not the question here - but don't pretend that it induce deep Knowledge of how market works or worst pretend that one cannot have more deeper knowledge and use it.
Some insight of how market works ? This is one insight from Nassim Taleb with wich my model framework agrees with: http://www.derivativesstrategy.com/magazine/archive/1997/1296qa.asp "It took me six months to be able to read prices in the pit. Locals basically read information from the order flow and squeezed the weak party. There's always a pack of five or six dominating locals who abruptly change the prices, who bid a lot higher than the previous offer and have the guts to do it, and the rest of them follow." Nevertheless such insight is far from being the full insight - and I won't say that these guys have guts to do so they have rather the power or delegated the power to do so which requires no special guts haha - since my model goes farther than that which is just local and not global insight of market. "Think Globally act locally" remember ?.
Finally I will not write the article, it's not my interest to tell too much about certain things related to my model. In fact I will desert the forum after Monday and I will come back in a few weeks or months or never It will dependif I want to make some fun again here .
I don't know Harry, sometimes I wonder. Your reply to my posting indicates that you have the insight and material to understand what I was saying, and yet you choose to disagree, or at least profess confusion. Repeat what I said , 10 times quickly, and you'll understand perfectly.
someone is always making huge bets in the wrong direction minutes before a report comes out. best, surfer