What to use for spread

• 05/25/2020 at 9:22 PM #133241
  OscJoh

  Hi,

  Sorry for such a simple question. I tried to search the forums but I was still not getting it.

  I haven’t been using PRT for a while and I’ve forgotten how spread is treated in backtests. Do I put IG’s spread as is or multiply it by two (for enter and exit).

  Example: If my DAX system (active only between 9-17) has a spread of 1, do I leave it as 1 or set it to 2?

  Thanks

  

  OscJoh

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  05/25/2020 at 9:35 PM #133243
  robertogozzi

  I usually set it to 2, since after 17:30 it increases and I often trade till 20:00.

  The average is less than 2, but I prefer keeping it a little bit higher.

   

  

  robertogozzi

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  05/26/2020 at 8:00 PM #133361
  OscJoh

  Okay, so that means you put together the spread for both entry and exit into the same number?

  

  OscJoh

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  05/26/2020 at 8:06 PM #133365
  Vonasi

  Price is price and spread is spread! If the market price is 100 and spread is 2 then as a buyer you pay more so the price to you is 101. If you want to sell then you get less than the market price so you sell at 99. The spread is the difference between the price you can buy at and the price you can sell at. So using a spread of 2 in PRT will result in those prices.

  

  Vonasi

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  05/27/2020 at 12:07 PM #133426
  OscJoh

  Thanks for clarifying and sorry if I’m being unclear (I understand what spread is).

  The question is more on how a PRT backtest treats the spread value. If it’s applied twice or not.

  From what I can see in your reply Vonasi you should put it in as is stated on IG’s website? Please see attached images. Spread for DAX appears to be 1.2 now between the times I would let the system trade. I should therefore put 1.2 in the backtest, yes?

  

  OscJoh

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  05/27/2020 at 12:43 PM #133434
  Vonasi

  Yes. Spread is as I said the difference between the price you can buy at and the price you can sell at.

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  OscJoh

  

  Vonasi

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