Dodging After-effects of Corporate Actions

mastermind007

Well-Known Member
#1
While trading is definitely fun and I certainly look forward to bonus/dividends/rights etc, strictly from the technical analysis point of view, all of the corporate actions are equivalent of hurdles that companies create on daily basis to obfuscate the stock's chart and cause us to mis read the trend.

One of the Remedy is to adjust the data for all corporate actions which is easier said than done. With so many companies, it is fairly easy to miss 'em.

Announcement file that NSE disseminates on daily basis is hard to read and mouthful with same phrases repeating over and over.

I am starting this thread with aim to enumerate all the possible corporate actions and how to go about adjusting data for the same. Along the process, aim is to learn the pros and cons of adjustment and whether or not you should save the unadjusted data in same database.

As a single trader, It is impractical to manage entire database correctly so we will focus on NIFTY companies only.

If you aim to keep your database for all NSE companies, it can easily be converted into actual full-time job.
 

mastermind007

Well-Known Member
#3
Pardon me for the ignorance, but isnt data from reputed vendors like GDFL / Esignal adjusted as per corporate action ?
This thread is about correctly understanding the adjustments that are required; most accurate procedures to go about doing it.

No idea about GDFL and ESignal's feed. The commercial data feed provider that I had used was not adjusting the data.

I don't remember having seen word "adjusted" or "Corporate Actions" in GDFL website. I'll check again though.

IMHO, GDFL's business focus is on "accurate". If he starts adjusting data, he can no longer call it accurate since it is no longer historically accurate.

What you need to realize is that every adjustment you makes in conventional software such as Metastock or Amibroker replaces old data so
any mistakes that occur during adjusting linger on and you cannot claim to have accurate historical data.

No idea about ESignal but with their steep annual fees, I am least inclined to even explore.

To be fair, this companies deal with people who want real time data for today.
 
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