I recently learned an important lesson about trend lines. Consider an expense graph that looks like this:
The values fluctuate up and down month to month. To smooth out the chart, average expenses over the preceding 12 months (a trailing 12 month average chart). By doing that, you might see something like this:
The rolling average shows a much more consistent picture.
There is a big flaw in this method, though. Let's add a permanent fixed expense starting in the first June. When plotting this to a trailing 12 month average chart, you would see something like this:
From the chart, it looks like you have a bad trend developing. It's not obvious from the trend line that you had a large, permanent increase.
The main lesson learned here is to look at your data in multiple ways. Look at different date ranges. For example, a trailing 3 month average would have shown a clearer picture in this case.