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Data Adjustment For Backtesting

User12345
User12345 ✭
in Trading Strategies
Hello everyone,

I'd like to ask you for clarification regarding StockCharts adjusted data;

I have performed backtests on a number of data (including stock price, stop, target, high/low) and have realized that this adjustment is made automatically when a chart is opened. I'm surprised that this adjustment is automatic and I have the impression that this has misled the results, especially as some of the backtested data goes back several decades. Do you think I should use the unadjusted data for backtesting and redo, or does it make no difference?

Thank you very much for your answers,

Have a nice day!

Comments

  • markd
    markd mod
    edited May 2024
    Data points should stay in the same relation to each other (higher, lower, percentage) after adjustment, so using adjusted data should be fine, unless your testing includes constants, like some number of points change, - e.g. hold for 5 points - instead of maybe hold for a 1% gain. But indicators and averages (the shapes and crossovers) should not be affected.

    This may not hold for point and figure.
  • User12345
    User12345 ✭
    Hello,
    Thank you very much!
    With regard to splits, do you think there is a particular impact for very old data?
  • markd
    markd mod
    No.

    But when you look at older charts for split stocks, keep in mind that the stock never actually traded at those very low adjusted prices. So the "feel" is different.

    You can get unadjusted data for a symbol by putting an underscore in front of the symbol e.g. _IBM, set the select start/end date to a past period and compare vs adjusted.

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