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Greetings --

I am seeing code that restricts the purchase to stocks with a maximum price of $10. And questions such as this one:

"Is a stock below $10 more likely to double or treble than a stock over $10?
The price filter is based upon the ASX300 (Roughly) so the small caps are basically not included."

I'd like to make two points.

One. There is good evidence that lower price stocks gain a higher percentage than higher price stocks given conditions that cause both to rise.

Two. Historical prices cannot be relied upon unless those prices are Not adjusted for splits and dividends. A stock that was $15 in 2004, then split 2:1 in 2006, will appear today to have been $7.50 in 2004. But it was not, and the bias toward lower price stocks does not apply to a purchase made in 2004 in a backtest.

Thanks,
Howard
www.quantitativetradingsystems.com

<blockquote data-quote="howardbandy" data-source="post: 200019" data-attributes="member: 9179">Greetings --I am seeing code that restricts the purchase to stocks with a maximum price of $10.&nbsp; And questions such as this one:&quot;Is a stock below $10 more likely to double or treble than a stock over $10?The price filter is based upon the ASX300 (Roughly) so the small caps are basically not included.&quot;I&#039;d like to make two points.One.&nbsp; There is good evidence that lower price stocks gain a higher percentage than higher price stocks given conditions that cause both to rise.&nbsp; Two.&nbsp; Historical prices cannot be relied upon unless those prices are Not adjusted for splits and dividends.&nbsp; A stock that was $15 in 2004, then split 2:1 in 2006, will appear today to have been $7.50 in 2004.&nbsp; But it was not, and the bias toward lower price stocks does not apply to a purchase made in 2004 in a backtest.Thanks,Howard<a href="http://www.quantitativetradingsystems.com" target="_blank">www.quantitativetradingsystems.com</a></blockquote>

[QUOTE="howardbandy, post: 200019, member: 9179"] Greetings -- I am seeing code that restricts the purchase to stocks with a maximum price of $10. And questions such as this one: "Is a stock below $10 more likely to double or treble than a stock over $10? The price filter is based upon the ASX300 (Roughly) so the small caps are basically not included." I'd like to make two points. One. There is good evidence that lower price stocks gain a higher percentage than higher price stocks given conditions that cause both to rise. Two. Historical prices cannot be relied upon unless those prices are Not adjusted for splits and dividends. A stock that was $15 in 2004, then split 2:1 in 2006, will appear today to have been $7.50 in 2004. But it was not, and the bias toward lower price stocks does not apply to a purchase made in 2004 in a backtest. Thanks, Howard [url]www.quantitativetradingsystems.com[/url] [/QUOTE]

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