Analysing strategies using Yahoo finance daily OHLC and spread betting charts.

[cassiopeia]

I keep reaching an impasse. When I attempt to analyse a strategy based on daily Yahoo prices for a stock, I get entirely different results than when I apply the same strategy to rolling spread betting prices using their charts. in one case, using the spread betting charts I get around 15% profit per year, using Yahoo -15%! Of course I can't analyse many strategies and stocks doing it visually, I need the OHLC data.

I think the Yahoo data has more short term volatility. By that I mean from one day to the next as well as OHLC prices during the day which is likely to stop out a trade. Obviously, there should be slight differences between the two, but in some cases it's as if I'm looking at an entirely different stock. I've converted it into different currencies and it still makes no sense. The spread betting companies refuse to provide the raw data, even though it's available via their charts.

Can anyone explain this?

 

[tomorton]

Check that both charts are set to display the same side of the quote - usually the default is the bid price but some charts can be re-set to show the ask price, while some are by default set to show the mid-price.

Beyond that, I can only agree - SB firm's charts are often way off other sources'. Its a killer in short time-frames.

Note also of course that SB quotes are also off from their own charts' prices anyway. And its the quotes that count, since it is these which are the triggers for orders, not the chart price display.

 

[Trader333]

Yahoo data is based on actual trades made where a SB company offers you a quote that they have made up themselves. The two will be related to a degree but I would never trust prices given by a SB company as a basis for developing a trading strategy because at the end of the day you are trading against them. Yahoo prices will have inaccuracies in it but I would favour it over SB companies although to be honest I wouldn't use either.

 

[cassiopeia]

Perhaps they were the best prices for low amounts. The prices might be for a few thousand quid, but not tens of thousands.

When I place a prospective bet, they display the order book with progressively less favourable prices for higher amounts, much as the same any stockbroker would do, but they add a wider spread, instead of charging commission.