Python for Finance Cookbook

Technical Analysis in Python

In this chapter, we will cover the basics of technical analysis (TA) in Python. In short, TA is a methodology for determining (forecasting) the future direction of asset prices and identifying investment opportunities, based on studying past market data, especially the prices themselves and the traded volume.

We begin by introducing a simple way of visualizing stock prices using the candlestick chart. Then, we show how to calculate selected indicators (with hints on how to calculate others using selected Python libraries) used for TA. Using established Python libraries, we show how easy it is to backtest trading strategies built on the basis of TA indicators. In this way, we can evaluate the performance of these ...