How much to buy

Discussion in 'Strategy Development' started by clarodina, Mar 12, 2009.

  1. Have three questions abt how many shares to buy for a stock

    1) When backtesting a system on stock rather than on futures, there is a different as stock would trade on a different range like from $1 to $30. If just input a std number of shares to buy like 1000 shares than the figures from backtest are not normalized. when a stock is at $1 than number of share would definitly more than when the stock is trading at $30. The usual % money management model does not seems to fit to decide how much to buy. Any pointer?

    2) The above problem would have another problem that is impossible to input a std commission in the backtesting when the broker commission is calculated as % on the trade value. Commission would varies depending on the stock price * number of shares.

    3) Abt the closing price, does the closing price usually the offer or the bid price?