The type of data you have determines the type of trendline you should use.
Excel trendline types
Trendline reliability A trendline is most reliable when its R-squared value is at or near 1. When you fit a trendline to your data, Graph automatically calculates its R-squared value.
Excel trendline equation is wrong - reasons and fixes Excel trendline types When adding a trendline in Excel, you have 6 different options to choose from.
If you want, you can display this value on your chart. Linear A linear trendline is a best-fit straight line that is used with simple linear data sets. Your data is linear if the pattern in its data points resembles a line.
A linear trendline usually shows that something is increasing or decreasing at a steady rate.
How to Draw Trend Lines Correctly ☝
In the following example, a linear trendline clearly shows that refrigerator sales have consistently risen over a year period. Notice that the R-squared value is 0.
Logarithmic A logarithmic trendline is a best-fit curved line that is most useful when the rate of change in the data increases or decreases quickly and then levels out. The following example uses a logarithmic trendline to illustrate predicted population growth of animals in a fixed-space area, where population leveled out as space for the animals decreased.
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- Choosing the best trendline for your data Microsoft Graph previous page next page A linear trendline is a best-fit straight line that is used with simple linear data sets.
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Note that the R-squared value is 0. Polynomial A polynomial trendline is a curved line that is used when data fluctuates. It is useful, for example, for analyzing gains and losses over a large data set.
Excel trendline equations and formulas
The order of the polynomial can be determined by the number of fluctuations in the data or by how many bends hills and valleys appear in the curve. Which trend line to choose in Order 2 polynomial trendline generally has only one hill or valley.
Order 3 generally has one or two hills or valleys. Order 4 generally has up to three. The following example shows an Order 2 polynomial trendline one hill to illustrate the relationship between speed and gasoline consumption.
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Power A power trendline is a curved line that is best used with data sets that compare measurements that increase at a specific rate — for example, the acceleration of a race car at one-second intervals. You cannot create a power trendline if your data contains zero or negative values.
In the following example, acceleration data is shown by plotting distance in meters by seconds. The power trendline clearly demonstrates the increasing acceleration. Exponential An exponential trendline is a curved line that is most useful when data values rise or fall at increasingly higher rates.
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You cannot create an exponential trendline if your data contains zero or negative values. In the following example, an exponential trendline is used to illustrate the decreasing amount of carbon 14 in an object as it ages. Note that the R-squared value is 1, which means the line fits the data perfectly.
Moving average A moving average trendline smoothes out fluctuations in data to show a pattern or trend more clearly. A moving average trendline uses a specific number of data points set by the Period optionaverages them, and uses the average value as a point in the trendline.
If Period is set to 2, for example, news trading binary the average of the first two data points is used as the first point in the moving average trendline.
The average of the second and third data points is used as the second point in the trendline, and so on. In the following example, a moving average trendline shows a pattern in number of homes sold over a week period.
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I will try to explain the differences and when to use them. On Tableau, you can download the Superstore sample dataset and put sales on Columns and Profit on the Y-axis to follow along.