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Python Trading Indicators Guide

This document provides a technical reference guide for setting up a Python environment for financial data analysis and trading indicators. It includes code snippets for fetching historical market data and implementing key technical indicators like the Relative Strength Index (RSI) and Volume Weighted Average Price (VWAP). Additionally, it outlines a data sanitization checklist to ensure data integrity before backtesting trading strategies.

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gayukavya11
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2 views1 page

Python Trading Indicators Guide

This document provides a technical reference guide for setting up a Python environment for financial data analysis and trading indicators. It includes code snippets for fetching historical market data and implementing key technical indicators like the Relative Strength Index (RSI) and Volume Weighted Average Price (VWAP). Additionally, it outlines a data sanitization checklist to ensure data integrity before backtesting trading strategies.

Uploaded by

gayukavya11
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Python for Data Analysis & Trading Indicators

Technical Reference Guide for Financial Data Pipelines

1. Core Python Environment Setup

Initial environment configuration for fetching historical market datasets using modern financial libraries:

import numpy as np
import pandas as pd
import yfinance as yf

# Fetching historical market data


ticker = "[Link]"
df = [Link](ticker, start="2025-01-01", end="2026-08-01")
[Link](inplace=True)

2. Technical Indicator Formulas & Implementation

A. Relative Strength Index (RSI - 14 Period)

The Relative Strength Index measures momentum on a scale of 0 to 100.

delta = df['Close'].diff()
gain = ([Link](delta > 0, 0)).rolling(window=14).mean()
loss = (-[Link](delta < 0, 0)).rolling(window=14).mean()

rs = gain / loss
df['RSI_14'] = 100 - (100 / (1 + rs))

B. Volume Weighted Average Price (VWAP)

VWAP = ∑ (Price × Volume) / ∑ Volume

df['Typical_Price'] = (df['High'] + df['Low'] + df['Close']) / 3


df['Price_Volume'] = df['Typical_Price'] * df['Volume']
df['VWAP'] = df['Price_Volume'].cumsum() / df['Volume'].cumsum()

3. Data Sanitization Checklist

• Verify zero missing values ([Link]().sum()) across critical time-series columns.

• Align market timestamps to local exchange timezone (e.g., Asia/Kolkata).

• Ensure split and dividend adjustments are cleanly applied prior to strategy backtesting.

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