Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

What Forecast Directional Accuracy is needed for a model to be profitable?

April 26, 2017directional forecast model needed profitable

0

Posted

What Forecast Directional Accuracy is needed for a model to be profitable?

1 Answer

0

Posted

This depends on factors such as volatility, transaction costs and other Trading System parameters. In general, it should at least be above 50%. Then the forecasted direction of price change per bar is more often right than wrong. With the Statistical Simulation data series it is possible to project the potential returns based on expected values for FDA, FDS, volatility, transaction cost and other Trading System parameters. See the Users Guide sections about Statistical Simulations for more information about this.