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Lära Challenge: Plot Moving Average | Financial Data Analysis with Python
Python for FinTech

bookChallenge: Plot Moving Average

Moving averages are widely used in financial analysis to smooth out short-term fluctuations and highlight longer-term trends in price data. By averaging a set number of past data points, a moving average helps you see the underlying direction of a financial time series, making it easier to identify trends and potential turning points. This is especially useful when analyzing volatile markets, as it reduces noise and provides a clearer picture of price movement. The simple moving average (SMA) is the most basic type, calculated by taking the mean of a fixed window of consecutive data points as you move through the series.

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Write a function that takes a list of daily closing prices and a window size, then calculates the simple moving average (SMA) for the given window. Plot both the original prices and the SMA on the same matplotlib chart with a legend and axis labels.

  • Calculate the SMA for each position in the list where enough data points are available.
  • For positions where the SMA cannot be calculated (before enough data points), use None as a placeholder.
  • Plot both the original price series and the SMA on a single chart.
  • Add a legend, x-axis label, y-axis label, and a title to the plot.
  • Raise a ValueError if the window size is less than 1 or greater than the number of prices.

Lösning

Var allt tydligt?

Hur kan vi förbättra det?

Tack för dina kommentarer!

Avsnitt 1. Kapitel 5
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Suggested prompts:

Can you explain how to calculate a simple moving average with an example?

What are the differences between a simple moving average and other types of moving averages?

How can moving averages be used to make trading decisions?

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bookChallenge: Plot Moving Average

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Moving averages are widely used in financial analysis to smooth out short-term fluctuations and highlight longer-term trends in price data. By averaging a set number of past data points, a moving average helps you see the underlying direction of a financial time series, making it easier to identify trends and potential turning points. This is especially useful when analyzing volatile markets, as it reduces noise and provides a clearer picture of price movement. The simple moving average (SMA) is the most basic type, calculated by taking the mean of a fixed window of consecutive data points as you move through the series.

Uppgift

Swipe to start coding

Write a function that takes a list of daily closing prices and a window size, then calculates the simple moving average (SMA) for the given window. Plot both the original prices and the SMA on the same matplotlib chart with a legend and axis labels.

  • Calculate the SMA for each position in the list where enough data points are available.
  • For positions where the SMA cannot be calculated (before enough data points), use None as a placeholder.
  • Plot both the original price series and the SMA on a single chart.
  • Add a legend, x-axis label, y-axis label, and a title to the plot.
  • Raise a ValueError if the window size is less than 1 or greater than the number of prices.

Lösning

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Var allt tydligt?

Hur kan vi förbättra det?

Tack för dina kommentarer!

Avsnitt 1. Kapitel 5
single

single

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