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NN how to judge them
1) NN be should only be judged on how they predict market changes in trend.
2) It is easy for NN or linear regression for that matter to predict a current
trend to continue.
When one claims 70% to 80% success in picking the trend with a NN you will find
most of the trades are continuation of the trend, rather than picking turning
points. I think that you will find NN success at Vantage point picking turning
points close to 50%.
Conclusion: Unless NN has 70%+ of picking turning points it is a waste of
money. If you buy it for trending trades, then that is a an expensive option,
might as well use moving averages. The best NN that can pick turning points
(which is a major NN hill to climb, and you would get huge NN industry
recognition as a man with huge skills) would not be on the open market for
sale. The NN would be be making millions for some individuals or institutions
some where ? Also the would be very short term trading positions.
Have a good study before you spend your funds.
Another point when you see a NN demo, beware how timely the data is relative to
how they get there forecast. In real life the data they use, is never available
before the event they wish to forecast.
http://www.sold.com.au - SOLD.com.au
- Find yourself a bargain!
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