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The financial industry uses Excel for trading on a regular basis.  The common investor isn’t going to use Excel this way, but the tactics for applying Excel in a trading setting are uncomplicated.  You simply need to know the way you intend to use Excel, and what sort of trading work-flow matches your needs.

Among the initial things to consider is how you will use Excel for trading.  Will you be publishing price details into a spread sheet?  Will you monitor your positions, profits, and losses there?  Do you wish to combine it with an active trading program?  Do you want to create a complete Excel for trading system with visual basic, charts, order entry, and such?

Importing price and volume data is one way to implement Excel for trading.  This is generally done through DDE hyperlinks to an outside prices repository. DDE links are really simple to use and do a good job of posting moving prices, but can not handle large volumes.  Alternatively, you can transfer pricing data into Excel from the web using web queries straight from Excel’s Data from Web features. It’s great for fundamental data grab of prices, volume, financial statements, and so forth from Oanda and other standard internet pages.  Finally, you can capture market data into your worksheet using the Data from Other Sources function which allows you to use SQL Server, analyzer engines, XML, and ODBC connections. 

Once you have your information in Excel for trading purposes, then what to do after that?   You can build a position blotter, favorites, profit and loss statement, historical trading log, or a big pricing storage sheet.  These are useful for present and past risk analysis, calculating your trading performance using common statistics like volatility, performance ratio, upside/downside, etc.  There are a huge number of uses of Excel for trading spreadsheets.

Best practices of Excel for trading involve planning your spreadsheet workflows and relationships so everything works together correctly and efficiently.  You have a selection here of using a multiple spreadsheet Excel file set or creating a universal workbook with many tabs.  The first concept is modular and works well because each separate workbook is for a specific purpose, is small, and easy to manage.  The downside is you may need to manage tons of links and Excel links have a tendency to get corrupted.  Huge Excel models with lots of sheets can be useful in Excel for trading it all works together.  But Excel slows down and the files become enormous if they have more than 5000 rows of data, charts, and many worksheets.  It can also be very risky to have your whole trading tool set in a single place.  Be sure to double save your tools externally all the time!

Thinking about these elements beforehand helps build the best Excel for trading tool set for your specific needs.