I'm doing some testing of systems on Forex, I calculate a transaction cost consisting of the spread + commissions, if I'm trading say the EUR/USD this works out at roughly 1.5 pips (for say IB).
How do I do the same thing for stocks? I can see the commission costs on the IB website, but what are the typical spreads for well known stocks? (GOOG for instance), how would I calculate a transaction cost?
You can get historical bid/ask spreads. Search Google. Most exchanges sell data of this kind.
Apart from doing just an academic study, this type of calculation is useless IMO. Slippage is much more important in trading than transaction costs. You miss a good entry and that can amount to the sum of commissions paid for the whole year.
Just go IB and forget about commissions forever.