Generating trade signals and managing existing trades are two typical uses of Excel. The everyday trader often just relies on his chart software or canned technical analysis newsletters. Building your own strategies in Excel can give you increased control, efficiency and trading profitability. There are a few things you need to learn, but overall the process is normally fairly smooth.
One of the first considerations is how you will use Excel for trading. Will you be importing price data into a spreadsheet? Will you track your positions, profits, and losses there? Do you intend to integrate it with an existing trading platform? Do you want to develop a complete Excel for trading system with VBA, charts, order entry, and such?
Bringing price and volume data into a spreadsheet automatically is one way to implement Excel for trading. This uses DDE links to a price data database, either an internal or vendor provided database. DDE links are efficient and can capture fast moving prices (with certain limitations relevant to algorithmic trading). Importing price and volume data into Excel with web query functionality is an alternative to DDE links. This works if you want to capture a smaller volume of prices or economic data from websites like Yahoo Finance, Google Finance, etc. You can also import data into Excel using the Data from Other Sources function. This connects to SQL Server, MS Analysis Services, XML files and ODBC -- this is a good option for the technically minded.
Once you have your data into Excel for trading purposes, then what will you be doing with it? You can create a position blotter, watch list, profit and loss statement, trade history log, or a big price history database. These can then be used for current day and historical trend analysis, evaluating your trading performance using common statistics like standard deviation, sharpe ratio, drawdown, maximum drawdown, etc. There are virtually unlimited uses of Excel for trading workflows.
Implementing Excel for trading requires planning your spreadsheet designs to put everything together correctly. The key things are having accurate and well tested formulas, and being able to find what you need when you need it. Multiple simpler spreadsheets linked together or a single large spreadsheet with multiple tabs are possible. You will likely have a mixture as you build out your spreadsheets. Keep in mind that it's easier to manage small workbooks with fewer tabs and they take up less memory and run faster. The ideal approach is to design in a modular way with each spreadsheet for a specific purpose. Be careful of external links, however. These can break and slow things down, and are difficult to debug if you have a lot of them. Also, if your spreadsheets have more than 10,000 rows of data, charts, and multiple tabs together then they may slow down. It's risky to have your whole trading workflow in one Excel file. Be sure to back up your files externally.
Hopefully these concepts will be useful in kick starting your Excel for trading.
One of the first considerations is how you will use Excel for trading. Will you be importing price data into a spreadsheet? Will you track your positions, profits, and losses there? Do you intend to integrate it with an existing trading platform? Do you want to develop a complete Excel for trading system with VBA, charts, order entry, and such?
Bringing price and volume data into a spreadsheet automatically is one way to implement Excel for trading. This uses DDE links to a price data database, either an internal or vendor provided database. DDE links are efficient and can capture fast moving prices (with certain limitations relevant to algorithmic trading). Importing price and volume data into Excel with web query functionality is an alternative to DDE links. This works if you want to capture a smaller volume of prices or economic data from websites like Yahoo Finance, Google Finance, etc. You can also import data into Excel using the Data from Other Sources function. This connects to SQL Server, MS Analysis Services, XML files and ODBC -- this is a good option for the technically minded.
Once you have your data into Excel for trading purposes, then what will you be doing with it? You can create a position blotter, watch list, profit and loss statement, trade history log, or a big price history database. These can then be used for current day and historical trend analysis, evaluating your trading performance using common statistics like standard deviation, sharpe ratio, drawdown, maximum drawdown, etc. There are virtually unlimited uses of Excel for trading workflows.
Implementing Excel for trading requires planning your spreadsheet designs to put everything together correctly. The key things are having accurate and well tested formulas, and being able to find what you need when you need it. Multiple simpler spreadsheets linked together or a single large spreadsheet with multiple tabs are possible. You will likely have a mixture as you build out your spreadsheets. Keep in mind that it's easier to manage small workbooks with fewer tabs and they take up less memory and run faster. The ideal approach is to design in a modular way with each spreadsheet for a specific purpose. Be careful of external links, however. These can break and slow things down, and are difficult to debug if you have a lot of them. Also, if your spreadsheets have more than 10,000 rows of data, charts, and multiple tabs together then they may slow down. It's risky to have your whole trading workflow in one Excel file. Be sure to back up your files externally.
Hopefully these concepts will be useful in kick starting your Excel for trading.
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