Wall Street uses Excel for trading on a daily basis. The average investor or trader doesn't use Excel this way, but the techniques for implementing Excel in a trading environment are relatively simple. You just need to know how you intend to use Excel, and what kind of trading workflow works for you.
You should first ask yourself how you might use use Excel for trading. Will you just import prices and volume data into a spreadsheet? Do you intend to generate buy/sell signals? How about tracking positions, profits and losses in a spreadsheet? Do you have an existing trading software platform you'd like to integrate with? Would you consider building a complete Excel for trading system with VBA, formulas, price imports and other features?
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.
Excel for trading depends on data. Once that's imported, what will you do with the data? Good options are watch lists, blotters, P&L statements, portfolio trackers, trade logs and heat maps. These can be used for intraday or historical analysis, trading performance, risk and trade management. Analytics like delta, drawdown, maximum adverse excursion, maximum profit realized or stop loss points can be calculated and displayed. There are unlimited uses of Excel for trading so feel free to let your imagination flow.
You should spend some time planning your spreadsheet designs before you implement Excel for trading. A good modular design helps understand the data flows and makes testing for accuracy much easier. Being able to find what you need when you need it is critical during a trading session. Several simple spreadsheets linked together can often be better and more efficiency than a single large spreadsheet with multiple tabs. It really depends on your preference and your system resources available. As you build out your spreadsheets keep in mind that it's easier to manage small workbooks and the tend to run faster. Whether you have single or multiple workbooks, each spreadsheet should have a specific purpose. A few caveats: external links can become corrupted and slow things down so be careful with them. More than 15,000 rows of data can slow Excel down. Make sure you back things up regularly. Charts should be used sparingly for intraday use, as your charting program is probably much better at this than Excel and charts tend to bloat your files.
Hopefully these concepts will be useful in kick starting your Excel for trading.
You should first ask yourself how you might use use Excel for trading. Will you just import prices and volume data into a spreadsheet? Do you intend to generate buy/sell signals? How about tracking positions, profits and losses in a spreadsheet? Do you have an existing trading software platform you'd like to integrate with? Would you consider building a complete Excel for trading system with VBA, formulas, price imports and other features?
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.
Excel for trading depends on data. Once that's imported, what will you do with the data? Good options are watch lists, blotters, P&L statements, portfolio trackers, trade logs and heat maps. These can be used for intraday or historical analysis, trading performance, risk and trade management. Analytics like delta, drawdown, maximum adverse excursion, maximum profit realized or stop loss points can be calculated and displayed. There are unlimited uses of Excel for trading so feel free to let your imagination flow.
You should spend some time planning your spreadsheet designs before you implement Excel for trading. A good modular design helps understand the data flows and makes testing for accuracy much easier. Being able to find what you need when you need it is critical during a trading session. Several simple spreadsheets linked together can often be better and more efficiency than a single large spreadsheet with multiple tabs. It really depends on your preference and your system resources available. As you build out your spreadsheets keep in mind that it's easier to manage small workbooks and the tend to run faster. Whether you have single or multiple workbooks, each spreadsheet should have a specific purpose. A few caveats: external links can become corrupted and slow things down so be careful with them. More than 15,000 rows of data can slow Excel down. Make sure you back things up regularly. Charts should be used sparingly for intraday use, as your charting program is probably much better at this than Excel and charts tend to bloat your files.
Hopefully these concepts will be useful in kick starting your Excel for trading.
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