Arithmetic Python Automated Trading Development, Basic Data Analysis Using Pandas

Today, automated trading systems are increasingly being used in financial markets.
Automated trading allows transactions to be executed without human intervention through code and algorithms,
enabling more sophisticated and rapid trading.
This article will explain the basics of data analysis using Pandas required to develop an automated trading system with Python.

1. Overview of Automated Trading Systems

An automated trading system is a system that automatically buys and sells when specific conditions are met.
This system is part of algorithmic trading, analyzing market data in real-time to execute trades at optimal moments.
To implement such a system, data collection, analysis, and trading strategies are necessary.

2. Importance of Data Analysis

The success of automated trading depends on the accuracy of data analysis.
Through data analysis, it is possible to identify market trends and predict the price movements of specific assets.
In this process, Python’s Pandas library is very useful.
Pandas is a powerful tool for data manipulation and analysis, allowing efficient processing of various forms of data using dataframes.

3. Introduction to Pandas

Pandas is a library for the Python programming language,
providing high-performance data structures and analysis tools.
It primarily uses a two-dimensional data structure called a DataFrame,
which makes it easy to handle and analyze tabular data.
Pandas offers functionalities for collecting data (web crawling, API calls),
cleansing and transforming data,
and performing complex data analysis tasks.

4. Installing Pandas

First, you need to install Pandas. You can install Pandas using the following command:

pip install pandas

5. Basics of Data Analysis using Pandas

5.1 Creating a DataFrame

A DataFrame in Pandas is the basic structure for data analysis.
There are multiple ways to create a DataFrame,
and the simplest way is to use a dictionary.

import pandas as pd

data = {
    'Date': ['2021-01-01', '2021-01-02', '2021-01-03'],
    'Close': [100, 102, 105],
    'Volume': [1000, 1200, 1500]
}
df = pd.DataFrame(data)
print(df)

5.2 Understanding the DataFrame

The created DataFrame is as follows:

         Date  Close   Volume
        0  2021-01-01  100  1000
        1  2021-01-02  102  1200
        2  2021-01-03  105  1500

Each column can have various data types,
and you can access each row through its index.

5.3 Reading and Saving Data

Pandas provides functionality to read and write data in various formats including CSV, Excel, and SQL.
For example, reading a CSV file can be done as follows:

df = pd.read_csv('data.csv')

And saving the DataFrame to a CSV file can be done like this:

df.to_csv('output.csv', index=False)

5.4 Basic Data Manipulation

5.4.1 Selecting and Adding Columns

To select a specific column from the DataFrame, use the following method:

closing_prices = df['Close']

To add a column, you can do as follows.
For instance, you can add a new column representing a 5% increase in the closing value:

df['5% Increase'] = df['Close'] * 1.05

5.5 Data Filtering

The following method is used to filter data that meets specific conditions:

high_volume = df[df['Volume'] > 1200]

6. Basic Visualization

Pandas integrates with Matplotlib to facilitate easy data visualization.
Below is an example of drawing a simple line chart for closing prices:

import matplotlib.pyplot as plt

df['Date'] = pd.to_datetime(df['Date'])
plt.plot(df['Date'], df['Close'], marker='o')
plt.title('Close Price Changes')
plt.xlabel('Date')
plt.ylabel('Close Price')
plt.show()

7. Collecting Stock Data

Now, let’s utilize Pandas to collect real-time stock data.
For this purpose, you can use the yfinance library.
To install yfinance, use the following command:

pip install yfinance

7.1 Collecting Data Using yfinance

You can collect data for specific stocks using the following code:

import yfinance as yf

stock_data = yf.download('AAPL', start='2020-01-01', end='2021-01-01')
print(stock_data)

8. Conclusion

This article covered the basics of data analysis using Python’s Pandas library.
Creating dataframes, data manipulation, and visualization are essential elements in constructing an automated trading system.
The ability to analyze data is crucial for establishing successful automated trading strategies,
and in this process, Pandas will be a very useful tool.
In the future, we will delve deeper into more advanced automated trading strategies and algorithms.