I am trying to do a prediction for NIFTY and BANKNIFTY at 9:15 am on a daily frequency:
a. that today's Close price will go above yesterday's Close price or not.
b. predicting the exact Close price of the index for the day.
How should I measure accuracy in b. prediction? And at what level of accuracy, I can say, the prediction accuracy is satisfactory.
Hi Gaurav
Since you are trying to predict the exact close price for the index, the correct measure for accuracy would simply be comparing the prediction with the actual price and checking how many times you are right.
However, I suggest predicting a range rather than the exact price and then checking for accuracy on whether the actual closing lies in the range or not.
Regarding the level of accuracy, you can compare for the times you are right, how much is your gain and if that gain outweighs the losses you will face in case the prediction goes wrong. But as a rule of thumb, it should be at least more than 50%.
Hope this helps.
thankyou!!