Error rate with the latest NARX simulations was moderately low. It was measured by dividing the difference between y-actual and y-predicted for the median price by the average length of the candle.
with H4 and H8 constructed bars, the lowest errors with respect to candle size was 18-21% in the case of some USDCAD data, and EURSEK (a very impressive 15%) which means that the average error between predicted and actual median was around only 15% of the average length of a bar.
Part #2 starts now:
Using that target prediction to create a profitable decision support system.
The main algorithm that I’m about to try is:
1. use NN to predict target for either H4 or H8
2. when target prediction is obtained, monitor the progression of the price:
if price moves away from target median by x pips (and a confirmation from indicator is obtained, if any), enter market.
3. exit market if either:
TP is hit
SL is hit
Target price candle is closed.