IntermediateMAD Academy0:46Charting

Why Your Chart Disagrees With History

Adjusted prices restate the past for splits and dividends, which makes returns correct and historical price levels wrong.

0:46 · 6 scenes

This lesson is part of a MAD Academy plan.

What the Lesson Covers

  1. 0:00Your chart shows a price the stock never actually traded at.
  2. 0:05What adjustment does. It restates every past price so a split or dividend does not look like a crash.
  3. 0:14The trade-off. Adjustment makes your return figures correct, and it makes every historical price level wrong.
  4. 0:24Where it bites. A support level at fifty from three years ago may sit at thirty-one on your chart.
  5. 0:33The practical answer. Use adjusted for returns and indicators, unadjusted when checking a historic level.
  6. 0:41Know which one you are looking at before quoting an old level.
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Educational content only. MadStockAlerts provides market commentary, research, and educational content. It is not personalized investment advice, and nothing here is a recommendation to buy or sell any security. Trading and investing involve substantial risk, including loss of capital. See the Risk Disclosure and Customer Agreement.
Educational content only. MadStockAlerts provides market commentary, research, and educational content. It is not personalized investment advice, and nothing here is a recommendation to buy or sell any security. Trading and investing involve substantial risk, including loss of capital. See the Risk Disclosure and Customer Agreement.
Why Your Chart Disagrees With History — MAD Academy Training Video · MadStockAlerts