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 Python, including those to download data, manipulate data, perform technical analysis, and backtest trading strategies….
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 of various outcomes in a process that is challenging to predict due to the involvement…
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 to measure the skewness of a trading strategy using Python. The skewness is a measure…
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 Python. The FRED website is an economic and financial database run by the FED of…
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 significant methodology widely applied in financial investment, focusing on optimizing returns while minimizing risk through…
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 two imaginary financial instruments, Company A and Company B, whose prices diverge over a specified…
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 its competitors. yfinance is a Python library that allows users to download historical data from…
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 a particular asset or investment. In this article, we will delve into how to calculate…
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. What is the idea behind the strategy? That is to have both indicators that confirm…
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 of its packages being free for commercial use, Python has become the preferred programming language…
