I have an algorithm I'm testing and I'm trying to figure out if I should implement stops and what level is appropriate.? I downloaded a bunch of historical bid data from my recent trades but the bids are all over the place -- sometimes at 50% of the current market price of the stock.? On close reading of the I noticed that it doesn't really specify what "price" actually will trigger a stop.? I have typically?been forced to choose a bid or ask level (or percentage) to trigger a stop or trailing stop in the past on other trading platforms.? Does IB use the actual trades to determine price at a given moment?? This implies I should be using the historical trade data as a price determinant rather than bids (or asks)? That does seem to be available from IB.
Any insights here would be appreciated...
Thanks
