How Daily Return, MA, RSI, and MACD Transform Raw Stock Data into Signals
A developer building a financial dashboard explains the mathematics behind key financial metrics used to process raw stock price data in a data pipeline. Daily return measures the percentage price change between consecutive trading days, while moving averages smooth price trends over a set number of days to reveal directional signals like golden and death crosses. The Relative Strength Index (RSI) uses exponential weighted averages of gains and losses over a 14-day period to produce a 0–100 momentum score, flagging overbought conditions above 70 and oversold conditions below 30. MACD is calculated by subtracting a 26-day exponential moving average from a 12-day EMA, with a 9-day signal line used to identify potential buy or sell triggers. Together, these metrics convert bronze-layer raw data into enriched, analysis-ready outputs for use in downstream pipeline layers.
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