Variables & Data Types: The Basics

What is a Variable? The "Boxes" for Your Data

Imagine you're packing for a move. You put your books in one box and label it "Books," your shoes in another and label it "Shoes." In programming, we do the same thing with data. A variable is simply a labeled container in the computer's memory where you can store a piece of information.

To get a clear mental model of this, let's watch a short clip that explains this "box analogy" perfectly.

In Python, creating a variable is as simple as giving it a name and assigning it a value with the equals sign (=):

# A variable named 'asset' storing the text 'EUR/USD'
asset = 'EUR/USD'

# A variable named 'entry_price' storing the number 1.0750
entry_price = 1.0750

Data Types: What Kind of Information is in the Box?

Just as you wouldn't calculate the square root of "Books," a program needs to know what kind of data it's working with to know what operations are possible. These categories are called data types. For now, we'll focus on the four most essential ones.

1. Integer (int): Whole numbers. Useful for counting things, like the number of shares or a value in pips.
   • risk_in_pips = 20
2. Float (float): Numbers with decimal points. This is the most important type for trading, as it's used for prices.
   • gbpusd_price = 1.25432
3. String (str): Text, which must be enclosed in single (') or double (") quotes. Used for asset tickers, dates, labels, etc.
   • ticker_symbol = 'SPX500'
4. Boolean (bool): Represents one of two values: True or False. This is the foundation for making logical decisions, which we'll explore more in the next lesson.
   • is_trade_open = True

You can always check the type of a variable using Python's built-in type() function:

price = 152.75
print(type(price))
# Output: <class 'float'>

ticker = "AAPL"
print(type(ticker))
# Output: <class 'str'>

To reinforce these concepts, the next part of the video you started provides a great summary of these data types and the rules for naming your variables.

Performing Basic Operations

Now that we can store data, let's do something with it. The most common operations in trading are arithmetic.

Arithmetic Operations with Numbers (int and float)

Python uses standard symbols for math:

• + (addition)
• - (subtraction)
• * (multiplication)
• / (division)

Let's apply this to a trading scenario. Imagine you're planning a trade on the S&P 500 index.

# Open your Jupyter Notebook in VS Code for this part!
# Create a new cell and type the following:

entry_price = 4500.50
stop_loss_price = 4490.50
take_profit_price = 4530.50

# Calculate the potential risk and reward
potential_loss = entry_price - stop_loss_price
potential_profit = take_profit_price - entry_price

print("Potential Loss per share:", potential_loss)
print("Potential Profit per share:", potential_profit)

# Calculate the risk-to-reward ratio
risk_reward_ratio = potential_profit / potential_loss
print("Risk/Reward Ratio:", risk_reward_ratio)

When you run this cell (using Shift+Enter), you'll see Python perform the calculations instantly. This is the foundation of analyzing trade parameters programmatically.

The following video shows a very similar example related to finance, calculating the total value of a stock position.

Operations with Strings (str)

The + operator does something different with strings: it joins them together. This is called concatenation.

greeting = "Hello"
trader_name = "Alex"
full_greeting = greeting + ", " + trader_name + "!"
print(full_greeting)
# Output: Hello, Alex!

Handling a Common Beginner Error: TypeError

What happens if you try to combine a string and a number with +?

ticker = 'EUR/USD'
price = 1.0750
# This line will cause an error!
# print("The current price of " + ticker + " is " + price)

If you run this, Python will stop with a TypeError because it doesn't know how to "add" text to a number. To fix this, you must explicitly convert the number to a string using the str() function.

# The correct way
print("The current price of " + ticker + " is " + str(price))

This is a fundamental concept for displaying results. The video below demonstrates this exact problem and solution.

A more modern and cleaner way to format strings in Python is using f-strings. You just put an f before the first quote and place your variables inside curly braces {}. Python handles the conversion automatically.

# Using an f-string (recommended)
print(f"The current price of {ticker} is {price}")

For Further Reading

The concepts we've discussed are foundational. For a detailed textual reference that you can review at your own pace, the following resource is excellent. It provides clear definitions and code examples for everything covered.

Conclusion

Excellent work today! You've taken your first steps as a programmer and learned how to communicate basic financial concepts to the computer. This is the bedrock upon which all your future automation will be built.

Key Takeaways:

• Variables are named containers for storing data (entry_price = 1.0750).
• Data has different types, with the most common being int, float, str, and bool.
• You can use arithmetic operators (+, -, *, /) to perform calculations, which is essential for trade analysis.
• Combining strings and numbers for display requires explicit type conversion (str()) or using f-strings (e.g., f"Price is {price}").

Preview for the Next Lesson:

Now that your program can store data and do math, the next logical step is to make decisions. In our next lesson, you'll learn about conditional statements (if, elif, else). This will allow you to write code that reacts to different scenarios, such as: "IF price breaks above the previous swing high, THEN a Break of Structure has occurred." This is where your code will start to embody the ICT logic you've been learning.