Gnuplot’s finance.dem: A Showcase of Financial Charting

The `finance.dem` demo in Gnuplot serves as a practical example of visualizing financial data, primarily focusing on stock prices. It demonstrates how Gnuplot can be used to create common financial charts like candlestick charts and moving averages. It’s a valuable learning resource for anyone interested in using Gnuplot for financial analysis.

Candlestick Charts

The most prominent feature of `finance.dem` is its creation of candlestick charts. These charts are a fundamental tool in technical analysis. Each candlestick represents the price movement of an asset over a specific period (e.g., a day). The candlestick body shows the range between the opening and closing prices. If the closing price is higher than the opening price (a gain), the body is typically displayed in a color such as green or white. If the closing price is lower than the opening price (a loss), the body is displayed in a color such as red or black. “Wicks” extending from the top and bottom of the body show the high and low prices for that period.

Gnuplot constructs these candlesticks using the `boxes` plotting style in conjunction with careful data manipulation. The demo highlights how to extract and format the necessary data columns (open, high, low, close) from a data file to create this visual representation.

Moving Averages

Beyond candlesticks, `finance.dem` usually incorporates moving averages. A moving average smooths out price data over a specified period, helping to identify trends. Common moving average periods are 50 days and 200 days. The demo demonstrates how to calculate and plot these averages along with the candlestick data. This allows users to easily visualize the relationship between current price action and longer-term trends.

Data Handling

The `finance.dem` script emphasizes proper data handling. Financial data is often stored in a comma-separated value (CSV) or similar text format. The demo shows how to use Gnuplot’s `using` keyword to specify which columns from the data file correspond to the open, high, low, and close values. It also shows how to filter data by date. By specifying xdata time, the axis labels can be automatically generated.

Customization and Further Exploration

While `finance.dem` offers a good starting point, users can customize the charts further. This includes changing colors, adding annotations, adjusting the time scale, and incorporating other technical indicators, such as volume or Relative Strength Index (RSI). The demo serves as a template for building more complex and personalized financial visualizations.

Key Gnuplot Commands Demonstrated

• `plot`: To generate the chart.
• `set style data boxes`: To define plotting style for candlesticks.
• `using`: To select specific data columns.
• `set xdata time`: To allow time format on x-axis.

By studying and modifying `finance.dem`, users can gain a solid understanding of how to leverage Gnuplot for visualizing and analyzing financial data.