Where can i find sample alogrithms for analyzing historical stock prices?
Can anyone direct me in the right direction?
Basically, I'm trying to analyze stock prices and see if I can spot any patterns. I'm using PHP and MySQL to do this. Where can I find sample algorithms like the ones used in MetaStock or thinkorswim? I know they are closed source, but are there any tutorials available for beginners?
Thank you,
P.S. I don't even know what to search for in google :(
Answer
A basic, educational algorithm to start with is a dual-crossover moving average. Simply chart fast (say, 5-day) and slow (say, 10-day) moving averages of a stock's closing price, and you have a weak predictor of when to buy long (fast line goes above slow) and sell short (slow line goes above the fast). After getting this working, you could implement exponential smoothing (see previously linked wiki article).
That would be a decent start. Take a look at other technical analysis techniques, but do keep in mind that this is quite a perilous method of trading.
Update: As for actually implementing this? You're a PHP programmer, so here is a charting library for PHP. This is the one I used a few years ago for this very project, and it worked out swimmingly. Maybe someone else can recommend a better one. If you need a free source of data, take a look at Yahoo! Finance's historical data. They dispense CSV files containing daily opening prices, closing prices, trading volume, etc. of virtually every indexed corporation.