Calucate MACD with Pandas DataFrames

by

What will we cover?

In this tutorial we will calculate and visualize the MACD for a stock price.

Step 1: Retrieve stock prices into a DataFrame (Pandas)

Let’s get started. You can get the CSV file from here or get your own from Yahoo! Finance.

import pandas as pd
import matplotlib.pyplot as plt
%matplotlib notebook
 
data = pd.read_csv("AAPL.csv", index_col=0, parse_dates=True)

Step 2: Calculate the MACD indicator with Pandas DataFrame

First we want to calcite the MACD.

The calculation (12-26-9 MACD (default)) is defined as follows.

  • MACD=12-Period EMA − 26-Period EMA
  • Singal line 9-Perioed EMA of MACD

Where EMA is the Exponential Moving Average we learned about in the last lesson.

exp1 = data['Close'].ewm(span=12, adjust=False).mean()exp2 = data['Close'].ewm(span=26, adjust=False).mean()data['MACD'] = exp1 - exp2data['Signal line'] = data['MACD'].ewm(span=9, adjust=False).mean()

Now that was simple, right?

Step 3: Visualize the MACD with matplotlib

To visualize it you can use the following with Matplotlib.

fig, ax = plt.subplots()
data[['MACD', 'Signal line']].plot(ax=ax)
data['Close'].plot(ax=ax, alpha=0.25, secondary_y=True)

Resulting in an output similar to this one.

12% Investment Solution

Would you like to get 12% in return of your investments?

D. A. Carter promises and shows how his simple investment strategy will deliver that in the book The 12% Solution. The book shows how to test this statement by using backtesting.

Did Carter find a strategy that will consistently beat the market?

Actually, it is not that hard to use Python to validate his calculations. But we can do better than that. If you want to work smarter than traditional investors then continue to read here.

Want to learn more?

This is part of a 2-hour full video course in 8 parts about Technical Analysis with Python.

If you are serious about learning Python for Finance check out this course.

  • Learn Python for Finance with pandas and NumPy.
  • 21 hours of video in over 180 lectures.
  • “Excellent course for anyone trying to learn to code and invest.” – Lorenzo B.

Get Python for Finance HERE.

Python for Finance

Learn Python

Learn Python A BEGINNERS GUIDE TO PYTHON

  • 70 pages to get you started on your journey to master Python.
  • How to install your setup with Anaconda.
  • Written description and introduction to all concepts.
  • Jupyter Notebooks prepared for 17 projects.

Python 101: A CRASH COURSE

  1. How to get started with this 8 hours Python 101: A CRASH COURSE.
  2. Best practices for learning Python.
  3. How to download the material to follow along and create projects.
  4. A chapter for each lesson with a description, code snippets for easy reference, and links to a lesson video.
GET eBOOKs Learn Python + Python 101

Expert Data Science Blueprint

Expert Data Science Blueprint

  • Master the Data Science Workflow for actionable data insights.
  • How to download the material to follow along and create projects.
  • A chapter to each lesson with a Description, Learning Objective, and link to the lesson video.
Get eBook Expert Data Science Blueprint

Machine Learning

Machine Learning – The Simple Path to Mastery

  • How to get started with Machine Learning.
  • How to download the material to follow along and make the projects.
  • One chapter for each lesson with a Description, Learning Objectives, and link to the lesson video.
Get eBook Machine Learning – The Simple Path to Mastery

Leave a Comment