Just keep on looking for the next character of your potential subsequence, starting behind the last found one. As soon as one of the characters can't be found in the remainder of the string, it's no subsequence. If all characters can be found this way, it is:
def is_subsequence(needle, haystack):
current_pos = 0
for c in needle:
current_pos = haystack.find(c, current_pos) + 1
if current_pos == 0 : return False
return True
