Stock technical indicators are indispensable in stock analysis. They are calculated by a different mathematical formula based on the historical stock prices. In algorithmic trading, technical indicators are also essential to form a trading signal that can trigger the opening and closing of a trade by a trading robot. The following Application was developped, using R as our programming language, to build some popular technical indicators, with the Dow Jones Industrial Average being our choice of stock market index to analyse . There will be three main groups of technical indicators presented here:
- Trend indicators — Simple Moving Average(SMA20 and SMA50).
- Momentum indicators — Moving Average Convergence Divergence (MACD), Relative Strength Index (RSI) and Price Rate Of Change (ROC) Indicator.
- Oscillation indicators — SIGNAL indicator.
Here we’ll be taking the data from an initial timeline of 01/01/2015 to date (2022) and see how our indicators perform. We’ll be using YFINANCE for downloading the data.