Coding and Backtesting a powerful indicator in Python

There are an extensive amount of technical indicators out there for trading purposes but traders being so picky will end up choosing only a handful of them and the indicator we are going to discuss today definitely adds to this list. Behold, the Disparity Index. In this article, we will first discuss what the Disparity Index is all about, the math behind the indicator, and then, we will move on to the coding part where we will use Python to first build the indicator from scratch, construct a simple trading strategy based on it, backtest the strategy on Google stocks and compare the returns to those of the SPY ETF (an ETF designed to track the movements of the S&P 500 market index).

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