Quant strategists employ different tools and systems in their algorithms to improve performance and reduce risk. One is the Monte Carlo simulation, which is quite powerful regarding option pricing or risk management problems. A Monte Carlo simulation represents the likelihood…
How to calculate the Sharpe Ratio in Python
Python is one of the most popular programming languages in finance. It is widely used for data analysis, machine learning and, of course, backtesting trading strategies. Today we will show you how to calculate and backtest a MACD, Moving Average…
The Python code language allows for backtesting and executing Python Trading Strategy Algorithms. Python is an open-source, high-level yet easy-to-learn computer programming language that is used in a wide variety of applications, including algorithmic trading and data analysis. With all…
In this article, we will implement a trading strategy that will combine a Relative Strength Indicator and a Simple Moving Average. Let’s call it an RSI and moving average trading strategy. We explain the strategy and code it in Python….
Triple Exponential Moving Average (TEMA) This indicator is used to identify the trend, retracement, and potential support and resistance. After the development of the Double Exponential Moving Average (DEMA), Patrik Mulloy enhanced the indicator and developed the TEMA. The interpretation…
Candlestick patterns have been a fundamental part of technical analysis in the world of trading for many years. Among the multitude of candlestick patterns, the Doji is one of the most widely recognized. We make a doji candlestick trading strategy. A…
Introduction This tutorial will implement the Chaikin Oscillator in Python using historical financial data from the iShares Russell 1000 Growth ETF (IWF). The first part will briefly review the theory behind this indicator. The second part will code a trading…
Introduction This article will implement a trading strategy utilizing the Commodity Channel Index (CCI) indicator. It will review the underlying theory. Subsequently, it will explain the procedure in Python for implementing the trading strategy on the SPY; furthermore, it will…
Python is one of the most popular programming languages in the world and almost a must-have skill if you are going into finance. However, there are still lots of people that don’t know how to use it. So, how do…
This article explores the implementation of a mean-variance portfolio in Python. It delves into the core concepts of Modern Portfolio Theory in Section 1 and proceeds to provide a practical Python example in Section 2. Modern Portfolio Theory is a…
Introduction This tutorial will implement a ROC trading strategy using Python. The first part will briefly explain the indicator and its calculation. The second part will calculate the Python example. We show you how to build a profitable ROC-based trading…
Python is the most popular programming language to backtest trading strategies. However, most people are afraid of it or don’t know where to start, while others think it’s difficult to learn. Today we will show you how to backtest an…
Pairs trading strategy is short-term and leverages the Law of One Price, an essential economic concept. This pairs trading strategy with Python involves simultaneously placing two positions in related securities to exploit short-term price divergences. To illustrate this strategy, consider…
Average Directional Index The direction or trend has played a major role in the financial market. An increase or decrease in the price of a financial instrument can occur for two reasons: randomness or fundamental factors. There is a saying…
Nowadays, data manipulation and programming are essential in finance for analyzing large datasets of historical data, modeling different financial scenarios, and, of course, backtesting trading strategies. But what do they use to do all this? The answer is Python. Python…
This tutorial will explain the procedure to build a Simple Moving Trading Strategy in Python; it will begin by explaining the indicator and subsequently implementing a Python example. Related reading: What is a simple moving average (SMA)? The SMA is…
Introduction This tutorial will use Python to implement a profitable trading strategy using the Williams %R indicator. The first part will explain the indicator, and the second part will implement the Python code. The second goal is to illustrate how…
Finding reliable sources of data to backtest your trading strategies can be difficult sometimes. Luckily, today we will show you a website to download historical economic data for free using Python. We show you how to download FRED data using…
This article will explain how to backrest a Weighted Moving Average in Python. In the first part, there will be a brief introduction and explanation of this indicator. Subsequently, we will implement a Python example to calculate the result of…
We show you how I build a profitable Hull-moving average strategy in Python. However, the main purpose of the article to show how it can be done using Python. The strategy itself is of minor importance in this tutorial. Hull Moving…
There are many factors that quants and algorithmic traders use when they develop trading strategies. Some of them are value, quality, size and, the one we will be backtesting today, momentum. Momentum is an investing factor that aims to benefit…
This article will explain how to implement the OBV (On Balance Volume) to the Amazon (AMZN) stock. The first part will explain the idea behind the indicator, while the second part will implement a trading strategy based on the OBV….
Given its wide range of uses, copper is commonly used as an indicator of global economic health. If you want to trade this popular commodity, it’s important to learn how copper is traded and choose the right copper trading strategy…
In this article, we will build a profitable trading strategy in Python. We will implement the strategy in different market scenarios to draw insight: How to build a profitable VWAP trading strategy with Python. Related reading: Trading and Hypothesis Testing…
Traders use a wide range of indicators when trading. Among the most popular are the momentum and mean-reversion indicators, but there also exist indicators that measure volatility, such as the average true range. Let’s make an average true range (ATR) trading…
In this tutorial, we will implement a trading strategy using the ATR indicator. The first part will explain this indicator. Then, we will show a practical example in Python using the SPY data. Throughout this tutorial, we will implement various…
In the world of trading and finance, understanding statistical measures is crucial for making informed decisions. One such measure that plays a significant role is the standard deviation. It helps investors and traders gauge the volatility and risk associated with…
Python has become a popular language among traders and financial analysts due to its versatility and extensive data analysis and visualization libraries. One powerful application of Python in the trading world is backtesting strategies, allowing traders to evaluate the performance…
Stochastic Oscillator Strategy
Many metrics and statistics are used to quantify a trading strategy’s performance. CAGR, standard deviation, Sharpe Ratio, and maximum drawdown are among the most popular indicators. However, today, we will look at one that is not used very often: How…
Introduction This article will explain and implement the Fibonacci retracement strategy in Python. At the same time, it will implement different Python functions to build this strategy. Related reading: –Algorithmic trading strategies Python (Backtesting, Code, List, And Plenty of Coding…
Introduction This tutorial will explain the Ichimoku Cloud indicator, and it will implement a trading example in Python using data from the iShares Core US Aggregate Bond ETF (AGG) and the Energy Select Sector SPDR Fund (XLE). Along the way,…
Libraries are an essential part of Python that makes programming faster and easier for developers. These two qualities are especially relevant in Algorithmic Trading. That’s why, in this article, we will explore some of the best algorithmic trading libraries in…
Introduction This tutorial will explain how to implement the Parabolic SAR indicator to build a trading strategy in Python, and along the way, it will introduce the Object Oriented Programming (OOP) approach to download the data, calculate the Parabolic SAR…
Yahoo!Finance is one of the most popular websites for investors. It offers various market data on stocks, bonds, currencies, and cryptocurrencies. It also offers market news, reports and analysis, options, and fundamental data, which sets it apart from some of…
Introduction This tutorial will explain the construction of a Money Flow Index trading strategy to you in Python. Along the way, it will implement class inheritance approach to build the code. The aim of the article is to show the…
Investors often evaluate the performance of their portfolios by examining various metrics, and one crucial measure is drawdown. Drawdown represents the peak-to-trough decline in the value of a stock or portfolio during a specific period. It helps investors assess the…
