Identifying trends: best fit method

One method of drawing a trendline is as a line of best fit. There are mathematical procedures for calculating a line of best fit (regression analysis) and some charting software includes it. Such precision isn’t usually necessary, and you can draw a line of best fit by ‘eye’; that is, by visual interpretation. If the charting software gives you the option of drawing the line on the screen, you place the cursor at a start point and then draw the line to an end point. If you’re not happy with the line you can delete it and try again. If you can’t draw the line on your computer screen you can print a hard copy of the chart and use a ruler and pencil.

In figure 3.2 I’ve drawn a straight line of best fit using visual interpretation through a number of data points.