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Can someone tell me what this means? In a System Test I was running, this was posted as the reason certain trades weren't taken. Coincidentally, two of them would have been the most profitable and would have changed the test results considerably. I checked the equity, and that was not the reason the trades weren't taken.
Generally, and this is for Patrick, I have found MetaStock's online (I don't mean the forum) and hard copy help entirely inadequate. I cannot find this term in the online Index or in the manual. As a former editor and having worked in publishing for many years it is hard to understand why MetaStock/Reuter's can't produce better documentation. Every term, every phrase, every single one should be defined for users. I know how much valuable time and frustration this would have saved me.
Patrick, perhaps you could create a forum for terminology not covered elsewhere in MetaStock?
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Rank: Advanced Member
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hi Shelley,
"Open Cost" refers to how much money you need to enter/open the trade. It goes back to the equity problem I explained a while back. I'm too lazy to find the post :) You might have read it already but I will repeat the idea for everyone so that my asnwer makes sense ...
The program (as previously stated, wether it is a bug or not is not the discussion here ;) )
When it receives a buy signal, calculates the number of shares to buy for the next day at the open.
So for example if I have $100 and the share at the time of the buy signal ( today's close ) is worth $10/share MetaStock will try to buy 10 shares the next day at the open.
If the stock opens at 10.50 so the open cost for that trade would be ($10.10 * 10 Shares) + commissions
So even if you did not have any commission settings you still end up needing $101 to enter the trade but unfortunately I only have $100 ....
So that's for the original explaination, now I tell most users to use %95 - %90 of their equity to avoid this problem, unfortunately it is not always enough and you always get these on huge price gaps ... Can you check on the two trades it missed and compare the close and the open values ... How big is the difference ... Also look into your commission settings what are they ste to?
Patrick :mrgreen:
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Rank: Advanced Member
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hey shelley.... there are also a couple options that we can set that often will result in the 'open cost' message, but lack of money is always the real issue.... i worked up something a good while back but never posted.... it might be of value.... will post it later.....h
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Rank: Member
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Joined: 2/7/2005(UTC)
Posts: 16
Location: BC
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Thanks guys. With your help and help from Roy Larsen, I think I've solved my testing problems. Thanks for the definition of Open Cost. I suspected that is what it meant but I needed confirmation.
Shelley
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