How to Build Reliable Trading Strategy Backtests in Python Using EODHD API
A common pitfall in backtesting trading strategies is relying on non-adjusted historical price data, which can generate false signals around stock splits, dividends, or ticker changes. Using split- and dividend-adjusted closing prices from a reliable provider like EODHD can significantly improve backtest accuracy. EODHD's REST API covers over 70,000 tickers across 50-plus exchanges and is accessible via standard Python libraries such as requests, pandas, and numpy. The approach involves four scripts covering data fetching, an SMA crossover strategy, an RSI mean-reversion strategy, and key performance metrics including Sharpe ratio and max drawdown. EODHD offers a free tier with end-of-day US data on a one-year delay, with full access starting at $19.99 per month.
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