I am trying to get my head around stock data and it's implementation in python. In starting I am using MACD indicator in Python stockstats library.
Thing I want to know, if I have 100 OHLC entries of a certain stock, how can I use MACD output to produce signals whether I should Buy or Sell or Hold? In Graph one can visualize but in terms of programming how do I get the idea? Sample code given below:
import pandas as pd
from stockstats import StockDataFrame as Sdf
from pandas_datareader import data, wb
data = pd.read_csv('data.csv')
stock = Sdf.retype(data)
print(stock.get('pdi'))
It produces output as given below:
0 0.000000e+00
1 -8.951923e-08
2 1.758777e-07
3 -3.844324e-08
4 -2.217396e-07
5 -3.893329e-07
6 -2.373225e-07
7 -5.082528e-07
8 -8.260595e-07
9 -1.099751e-06
10 -1.429675e-06
11 -1.211562e-06
12 -8.230303e-07
13 -5.163039e-07
14 -4.979626e-07
15 -4.777865e-07
16 -6.217018e-07
17 -1.145459e-06
18 -1.461550e-06
19 -1.744250e-06
20 -1.677791e-06
21 -1.820319e-06
22 -2.024092e-06
23 -1.958413e-06
24 -2.450087e-06
25 -2.805521e-06
26 -3.443776e-06
27 -4.047889e-06
28 -4.839084e-06
29 -5.208106e-06
...
1410 4.856951e-06
1411 6.075773e-06
1412 9.159968e-06
1413 9.985022e-06
1414 1.069234e-05
1415 1.140865e-05
1416 1.136520e-05
1417 1.156541e-05
1418 1.065633e-05
1419 9.176497e-06
1420 9.275813e-06
1421 8.254755e-06
1422 7.583274e-06
1423 7.301820e-06
1424 6.959007e-06
1425 6.292826e-06
1426 8.411427e-06
1427 8.746155e-06
1428 1.112640e-05
1429 1.299290e-05
1430 1.398810e-05
1431 1.441297e-05
1432 1.509612e-05
1433 1.462091e-05
1434 1.436198e-05
1435 1.390849e-05
1436 1.419959e-05
1437 1.554140e-05
1438 1.884861e-05
1439 2.163656e-05
Name: macd, Length: 1440, dtype: float64
Here you go, with explanation in comments.
import pandas as pd
from stockstats import StockDataFrame as Sdf
data = pd.read_csv('data.csv')
stock = Sdf.retype(data)
signal = stock['macds'] # Your signal line
macd = stock['macd'] # The MACD that need to cross the signal line
# to give you a Buy/Sell signal
listLongShort = ["No data"] # Since you need at least two days in the for loop
for i in range(1, len(signal)):
# # If the MACD crosses the signal line upward
if macd[i] > signal[i] and macd[i - 1] <= signal[i - 1]:
listLongShort.append("BUY")
# # The other way around
elif macd[i] < signal[i] and macd[i - 1] >= signal[i - 1]:
listLongShort.append("SELL")
# # Do nothing if not crossed
else:
listLongShort.append("HOLD")
stock['Advice'] = listLongShort
# The advice column means "Buy/Sell/Hold" at the end of this day or
# at the beginning of the next day, since the market will be closed
print(stock['Advice'])