If you have ever tried to add a simple moving average (or any data series) to a stock chart you may have noticed that after adding the series, the chart got all messed up!
Here is a short tutorial and an example file showing how to add a simple moving average to a stock chart. I am going to use the Simulator.xls as and example. It should be noted that all the unused columns on the BarData sheet (currently K-IV) of the simulator can be used to add indicators of your choice.
Trick number one. the =NA() trick
To plot a simple moving average (SMA), the formula is =AVERAGE(E132:E150)
So that would go in R150 on BarData Sheet.
There is a problem though. Excel will try to plot something when there is not enough data to average or even when there is an error. Here is an example of a chart we are trying to avoid.
The keep the chart clean, I want to generate the error NA# whenever I do not want anything plotted.
so to keep things looking right, change the formula in R150 to =IF(ISBLANK(E132),NA(),AVERAGE(E132:E150))
“If there is not enough data for this simple moving average, then give me NA# (so excel does not plot anything) otherwise just calculate the average.”
Next just drag and copy this formula from R150 up to R19 (the first cell where it is possible to have enought data to calculate the average!)
Now all that is left is to add this moving average to the chart. It’s surprisingly tricky though.
1. Right click on the chart and select “source data”
the following screen comes up. Click on “add” and fill it in as follows. (make sure there are some numbers in column R)
2. Select OK and take a look at the chart. Things should look funny on the chart now. Don’t worry about it, just find the data series “indicator”. It should be somewhere on the chart. In my case it plotted this price moving average on the secondary axis which is volume!
Hover your mouse around the volume series looking for “indicator”. Right click on the “indicator” series and change it to primary axis from secondary axis (which will be hidden somewhere down in the volume bars if it’s on the secondary axis. It can be hard to find/click on, if it is you may want to zoom in)
Now “indicator” should be plotted up there with price, but now the price chart will be all messed up!!!!!! (see how the first bar is missing parts!)
Next you once again need to hover your mouse around the price series looking for “indicator” when indicator is visible, right click on it and select “chart type”.
The following screen comes up and just select XY (Scatter) as shown and press OK.
Now the chart will look normal again.
The last step is to properly format this scatter chart to look like a line. For the last time find the “indicator” series on the chart and right click on it. This time select “format data series” and set it as follows.
Select “OK” and the resulting indicator should like like this.
One final tip.
Use google! If you are wanting to add a stochastic indicator for example, but don’t know how to calculate it. Try the following search:
This will return tons of Excel files described with the word stochastic. There is a good chance that you will find a nice example there. If you have no luck, next you should search investopedia.com, which often explains the calculations.