A trendline, also called “a line of best fit”, is an analytical tool that is used to visualize and represent the behavior of a data set to see if there’s a pattern.
In Excel, most charts allow trendlines except for pie, radar, 3-D, stacked charts and other similar ones.
As stated earlier, there are 6 different types of trendlines:
- Linear: From the name itself, this is a best-fit straight line usually used with simple linear data sets. Results are easy to interpret as they’re either increasing or decreasing at a steady rate.
- Logarithmic: This one is commonly used when there are quick changes in the data which levels out. It’s a best-fit curved line and uses a negative and/or positive values.
- Polynomial: A polynomial trendline is also a curved line used to visualize data fluctuations. The fluctuations are seen as a hill or valley in the trendline.
- Power: A power trendline is another curve line used with data sets comparing values that increase at a specific rate. This trendline is only possible for positive values.
- Exponential: An exponential trendline is also a curve line that’s useful for data sets with values that rise or fall at increasingly higher rates. Like a power trendline, you can’t use an exponential trendline with negative or zero values.
- Moving Average: This trendline is useful in forecasting through moving average. This shows a clear pattern or trend.