Should technical traders use charts adjusted for dividends?

[cassiopeia]

I notice companies who make their own market such as IG & CMC don't adjust their charts for dividends; so as soon as a stock goes ex dividend there's usually an instant drop in price on opening that day. Although they will credit or debit accounts to allow for dividends, this complicates strategies because it can have a profound effect on lines of support & resistance when trading over a scale of weeks or months using daily bars.

I've searched on this subject, but it's rarely addressed with respect to technical trading. Is there a standard rule or a common rule amongst the larger traders which can influence markets? Ideally strategies using adjusted and unadjusted charts should be back-tested to see which one works the best. Has anyone done this?

 

[Rufus_Leakey]

Trading strategies will show misleading results if used on data not adjusted for splits and dividends.

Here is something with test results.

To dividend adjust or not to dividend adjust? That is the question.

About once a month, someone asks how important it is to have dividend adjusted data. Or someone will comment they do not want to use Norgate Data because they do not adjust for dividends (it does b…

alvarezquanttrading.com

 

[javi]

In my opinion if you’re not trading for dividends you shouldn’t, charts get completely distorted.
Check IBM for example.