What normalization mode should I use when calculating stock movement


Hi all;

I am writing an app to determine what stocks to buy and sell. Fundamental to this i what normalization mode do I use for stock prices. If the stock splits 2:1, do I then work off the new lower price, and go adjust all my indicators to work off that price.

Or should I normalize it so I keep an adjusted price (i.e. double the new price) and when I order, when I determine to purchase 60 shares, it actually purchases 120 shares.

And same question for adding in the value of dividends paid (nice explanation here).

I can see pluses and minuses for each approach. And I'm guessing that either approach has the same problems, it just moves where it needs to be handled.

??? – thanks – dave


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