What are API endpoints and how can traders use them?

Dear traders, how do you obtain stock market data? Everyone should access fresh and accurate data to analyze investments and define great trading strategies. As you may know, buying a stock based on its price level is not the best option because buying a stock is all about buying a company. You should understand what you buy, undertake fundamental analysis, calculate the stock's fair value, and then understand how your selected stock is trading. Do technical analysis to define great entry and exit points, and only then buy your selected share. For all these actions, you need fresh data. Most traders gather company and stock information through their trading terminals, but terminals provide summarized information with limited historical data, which limits your analysis capabilities. That's where API endpoints come into play. Let's see what an API is and how to use it to access stock market data. I will also provide you with some usage examples to improve your investment analysis.

What is an API endpoint?

But first, let's understand what an API endpoint is. API (Application Programming Interface) endpoints serve as gateways to stock market information, providing structured data that can be used for detailed stock analysis. API endpoints are specific URLs or locations on the internet where you can send requests to retrieve or send data. For stock traders, these endpoints act as direct lines to real-time and historical financial data, financial statements, and market indices, enabling them to perform sophisticated analyses without manually gathering data.

Let me demonstrate what a stock market API endpoint looks like, and I will use the Price Target Consensus API as an example. The target price consensus is the average stock target price calculated by different investment analysts. You can access the API using this endpoint:

https://financialmodelingprep.com/api/v4/price-target-consensus?symbol=AAPL&apikey=""

How to extract stock data using an API endpoint?

You need to obtain your custom API key by registering with Financial Modeling Prep and then open the link I provided above and paste the key inside the brackets. You can replace the ticker with your selected stock. Here is the data this API endpoint returns when you fill in the data and open the link:

[

{

"symbol": "AAPL",

"targetHigh": 240,

"targetLow": 110,

"targetConsensus": 189.18,

"targetMedian": 195

}

]

This endpoint shows stock target prices. The targetHigh is the highest target price calculated by investment analysts, the targetLow is the lowest target price, and targetConsensus shows the average target price among different investment analysts. This data updates regularly when investment analysts update their calculated stock target price.

How to use the data?

1. Traders can build their own stock market app to analyze their selected stocks and see how the stock's target price changes. The stock target price correlates positively with the stock market price. When analysts update the stock target price, increasing it, it gives a strong boost to the stock market price. I've already explained how to create your first stock market app that calculates stock target price and sets Stop-Loss and Take-Profit using the Advanced Discounted Cash Flow API endpoint and the Historical Price Full API endpoint. You can read the article to see the API fetching logic and how to turn JSON data seen in the browser into actionable insights. If you want to use the Price Target Consensus API endpoint demonstrated in the example above, you can read the article on how to calculate stock target price, where I provide simple code on integrating your API endpoint into your simple stock market app.

2. Traders can extract data into Excel or Google Sheets to build custom models and analyze stocks quickly. You can read the article “Calculate Stock Fair Value with This Simple Valuation Model” to understand how to extract financial ratios for your selected stock into Excel and calculate stock target prices quickly.

3. If you are not building your custom stock market app or not analyzing the stock and just want to see stock target prices or other vital information, you can simply access the link, paste the required information, and see the fresh data. You can find detailed descriptions of each API endpoint, what they do, and what data you should input to get your desired information.

4. Traders can also build their custom trading bots or robots using API endpoints. The logic for fetching data will be similar to building your stock app, but you will be putting your custom assumptions inside the code and will be able to generate trading signals that will greatly improve your trading strategy.

I've listed some of the popular use cases for API endpoints and explained what they mean. You can use great data points to improve your investment analysis, company research, and shape your custom trading strategy.