Why Use Excel For Algo Trading?

[box type=”bio”] Jayantha has been selected as Campus Ambassador at AlgoJi- 2017. He is pursuing B.Tech. + M.Tech. (Dual Degree) from IIT BHU. His hobbies include maths and music.[/box]Excel, and other MS Office programs come with a programming language called as VBA (Visual Basic for Applications). You can use this language to write algorithms to give out buy or sell signals.

But why use excel? Why not any other API of a programming language like python or java.

Each programming language has its own strengths, in this article we discuss the advantages of using an excel API.


Easy Access to Resources

Microsoft Excel is perhaps the most widely used software on the planet, with the number of worldwide users estimated at over 1 Billion. Since a lot of financial data/ models are already available in Excel, Excel is used for Trading by a number of traders across the globe.

This is why Excel has one of the largest user communities available – help is only a hand away.

Easy to Analyse Data

Excel has numerous tools readily available for data analysis. For instance you can calculate standard deviation by a simple formula, or plot a regression curve without writing any code.

You can collect a wide variety of statistics and data in a single workbook, which provides for easier analysis of data.

Easy Visualization of Data

MS Excel provides excellent visualization of data. The latest statistics are entered into sheets of excel, and you can visualize these in a variety of charts and plots. All kinds of charts are available in excel, with a lot of customisable features and ease of modification.

Easy to Keep Track

In excel, you can write macros such that it writes every closing price, high, low, and other technical indicators such as moving averages into a particular sheet. This way, you can get to know the latest prices and indicators with just a glance of the data.  Also we know why a particular long/short signal was given, and debugging is simplified.

Easy Coding in VBA

Visual Basic is a simple language, it is very easy to comprehend and has an easy to understand syntax. It is not as difficult as C++ or Java or any other language. It is easy to debug as there are many inbuilt tools in excel VBA such as setting breakpoints, line-by-line execution and watches. Excel VBA also has other features like auto correct, auto suggest, which make programming faster and easier.

Easily Modify Strategy Parameters

Changing of a parameter of a model, such as how many periods should be considered in the calculation of an exponential moving average, can be done just by modifying the value of a particular cell.

Therefore, once you finish coding a strategy, its very easy to try out different parameters.

Easy to Collect and Move data

As live data is written into the excel sheet itself, it is easy to analyse, distribute and back-test on the historical data.If you need to further analyse this data in another environment, you can easily import the excel sheet on which the data has been entered.And what better way to store data is there than on an excel sheet.