I did a very similar project a few months back. My goal was to help alleviate some of the RSI issues I have, and give myself a different input device.
The precision was always tricky, and while fun, i eventually abandoned the project and switched to face tracking and blinking so i didn't have to hold up my hand.
For some reason the idea of pointing my webcam down, didn't dawn on me ever. I then discovered Project Gameface and just started using that.
Happy programming thank you for the excellent write up and read!
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