Trendline

[lezawang]

Hi
I want to know based on what excel draw the trendline? Does excel take the average of values and draw the Trendlne?
I have a chart look like "V" letter but upside down. When I right click --> trendline, excel will draw a line in the middle. It seems to me excel took the average values and draw the trendline. Thank you.

 

[joeu2004]

@lezawang.... No, it is not as simple as taking averages. For a linear trendline, Excel calculates estimated y (points on the trendline) by a method ironically called simple linear regression. See the wiki page "simple linear regression" for details. You might also look at the help page for the FORECAST function. But there are some critical typos there. For example, it says that "x and y are the sample means AVERAGE(known_x's) and AVERAGE(known y's)". It should say x-bar and y-bar; that is, x with a line over it and y with a line over it.