I would like to simplify the task for Neural network. to identify the flat market and trend market, specially identify the trend market when it is in baby phase. Just give the digital output, flat or trend for each candle bar. In this way, we do not need to update the trainer continuelly.
1) input, is the current candlebar, and previous 4, 7, or 11 candlebars.
2) Neural network has the defined pattern for flat market, takes these pattern that defined by this attached PDF by Joe Ross here. The neural network thereafter check the incoming candle against the defined patterns. belongs the pattern, then it is flat market. Does not belongs the pattern, then it is a trend market.
3) Out from the neural network shall be an indicator that give the phase, flat or trend.
We can use the MA cross or Heiken Ashi bar to handle the trend market, and stay out or use the stochastic(5,3,3) to handle the flat or range trading market. WhatI really need is to distinguish the trend market when it is in baby phase, from the flat market.
Attached is the definition of the congestion phase
Here you can also download the Joe Ross' The Law of Charts ebook free
Trading Educators Inc. - Joe Ross - Day Trading and Online Trading
Get Joe Ross' Trader's Trick Entry (TTE) ebook free
Trading Educators Inc. - Joe Ross - Day Trading and Online Trading
I think that the same PNN framework can be used for this, the only differene is that the trainer to get the two group, flat trend candles and trend candles, then the classficiation will automatically take the new currect candle and with the previous 3 candels to compare the pattern in the trainer, to get the class.