Loss function: Difference between revisions

Revision as of 02:50, 20 February 2024

Revision as of 14:43, 7 March 2024

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===Two-parameter loss function===

SpeciallyEspecially in trading, where there is a range[[Bid–ask_spread|spread]] in betweenwhich any price is correct, this range been called spread, and the "correct" value can be anywhere between bid and ask, including theminclusive, and ask (sell price) being higher than bid, is it as follows:

<math>L = \frac{abs(x - a) + abs(x - b) - (b-a)}{2}</math>