Use the prediction parameters costs tab to set up the costs associated with trades. The costs will be used when calculating prediction profits.
The parameters on this tab may or may not be visible depending upon the currently selected Prediction Wizard Interface Options. Press the Options button to change the Prediction Wizard Interface Options. For more information see Prediction Wizard Interface Options.
- Select and enter the Entry commission(s) and Exit commission(s) to use during training:
Per Trade $ – Specifies a fixed dollar commission per trade.
Per Trade % – Specifies a commission based upon a fixed percentage of the total value of each trade.
Per Share/Contract/Unit $ – Specifies a commission based upon a fixed dollar charge per share/contract/unit traded.
Per Share/Contract/Unit ticks/pips – Specifies a commission based upon a fixed number of ticks or pips in the case of FOREX data, for each share/contract/unit traded.
- Select and enter the Other costs to use during training:
Margin % per share/contract – Specifies the percentage of the share/contract cost that you must deposit when leveraging your trades. This type of margin is generally used to backtest stock trades on margin.
Margin $ per share/contract/unit – Specifies the number of dollars per share/contract/unit that you must deposit when leveraging your trades. This type of margin is typically used to backtest future trades on margin.
Slippage per share/contract/unit – Specifies the expected difference between the desired execution price for an order and the price at which the order is actually filled. Slippage should be used in a prediction if you wish to take into account real world conditions which often cause a difference in price between when you place a trade with your broker and when the trade gets filled on the floor.
When simulating a market order, a prediction only uses the next bars opening price and does not take into consideration whether the opening price was at the bid or ask. By setting slippage to the expected average bid ask spread, the entry and exit prices will be adjusted as if the opening price was at the opposite side of the bid ask spread as the entry or exit would occur.
Note that slippage is entered as the number of points you expect the market to move before the order is filled. If you have not selected ‘Point value for futures contracts’, then a one point move is equivalent to a one dollar change in price.
Point value for futures contracts – Specifies the amount by which the future price is multiplied to determine the dollar value of a contract. Point value should be used in a prediction if you want the profit/loss results to reflect the actual dollars you gained/lost instead of the points gained/lost.
Exchange rate for forex crosses, etc. – Specifies the exchange rate ticker symbol used to determine the dollar value of a forex contract.
Exchange rates should be used in a prediction to allow the profit/loss results to be calculated in dollars instead of the underlying currency of the forex contract. Additionally, specifying an exchange rate will allow the number of contracts to be traded to be properly calculated when specifying a given dollar amount to trade.
When you are satisfied with the prediction parameters to be used when training and optimizing press the OK button to return to the Prediction Wizard.
Topics of Interest:
What are Neural Networks?
Neural Network – Network Criteria Discussion (General)
Neural Network – Network Criteria Discussion (Objective)
Neural Network – Network Criteria Discussion (Advanced)
Troubleshooting Your Model – What to Do if You Feel You Haven’t Been Successful