In this tutorial, we will cover how to calculate the Simple Moving Average (MA) and the Exponential Moving Average (EMA) of a Time Series using the Pandas library in Python.
We will also take a brief look at what the Simple Moving Average and the Exponential Aveareg is.
The Moving Average is calcualted to identify the trend direction of a stock.
See the video to see how it can be done using the Python library pandas or see the code below.
We will use Pandas DataReader to read some historic stock prices. See this tutorial for details.
import pandas_datareader as pdr from datetime import datetime ticker = "AAPL" start = datetime(2019, 1, 1) data = pdr.get_data_yahoo(ticker, start) # You can also add end-date print(data.head())
Resulting in this.
High Low Open Close Volume Adj Close Date 2019-01-02 39.712502 38.557499 38.722500 39.480000 148158800.0 38.505024 2019-01-03 36.430000 35.500000 35.994999 35.547501 365248800.0 34.669640 2019-01-04 37.137501 35.950001 36.132500 37.064999 234428400.0 36.149662 2019-01-07 37.207500 36.474998 37.174999 36.982498 219111200.0 36.069202 2019-01-08 37.955002 37.130001 37.389999 37.687500 164101200.0 36.756794
Calculating the Simple Moving Average (MA) of the data can be done using the rolling and mean methods.
data['MA10'] = data['Close'].rolling(10).mean()
Where here we calculate the Simple Moving Average of 10 days. You can change it to fit your needs.
It is a bit more involved to calculate the Exponential Moving Average.
data['EMA10'] = data['Close'].ewm(span=10, adjust=False).mean()
There you need to set the span and adjust it to False. This is needed to get the same numbers as on Yahoo! Finance.
If you want to see the data on a chart you can use the following code.
import pandas_datareader as pdr from datetime import datetime import matplotlib.pyplot as plt data = pdr.get_data_yahoo('AAPL', datetime(2021,1,1)) data['MA50'] = data['Close'].rolling(50).mean() data['EMA50'] = data['Close'].ewm(span=50, adjust=False).mean() data[['Close', 'MA50', 'EMA50']].plot(figsize=(10,8))
This should result in a chart similar to this one.
This is part of the course of Master Technical Analysis with pandas.
In the next lesson you will learn about Calculating MACD with Pandas DataFrames.
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