How to Calculate the RSI Indicator in Excel - YouTube

Hello this is Mark from Tradinformed.com

and welcome to this video on how to calculate

the RSI Indicator. The RSI is the relative

strength index and it is a type

of momentum indicator the RSI literally

calculates the strength of the most recent close

compared to a set number a previous periods.

And we use the RSI to measure

and identify changes in the market trend

Now we're going to calculate the RSI indicator

and in the spreadsheet on the screen and I've got some historic data

already loaded onto the spreadsheet. I'm going to start here in this first column

and call it upward movement and the next column

I'm going to call it downward movement. And in the upward movement column what I want to identify

is that if the current close is greater than the previous close

then measure the difference between them. And likewise in

downward movement column I want to identify if

the current close is lower than the previous close

then again identify the difference and we do this by using an IF Statement

And I'm going to say = IF the current Close

greater than the previous close then

calculate the difference between these prices

and if not then do nothing

And likewise in here

we will then say = IF the current Close is

lower than the previous close and again

calculate the difference between them and if not

then do nothing. So we can drag these down to the

cells below. And the next two columns I'm going to work out the

average of these 2 movements. I'm going to put it here

the average upward movement and here the average downward movement

And I'm going to set a set number of

periods, this is a variable of the RSI Indicator and I'm

going to start off with 14 so I'm going to measure down 14 cells

and put in here =

Average and we take the average of these 14

periods. And I'm going to do the same

for the downward movement here. The cell below I'm going to use

a slightly different formula to calculate the next average

and this is previous average multiplied

by the number of periods -1

plus the current upward movement. And I take

all of that and divide it by the number of periods

periods. And go back into this

cell and because I specified cell U2

is an absolute reference cell. And I press F4

to make it a fixed cell

I do the same here, I take the previous average

multiply it by the number of periods

-1 and I'm going to add

to it the current downward movement and divide all of it

by the number period and again I'll go back into this

press F4

OK so these can now be copied down to the cells below.

This next column we're

going to work out the relative strength and this is simply the

current average upward movement divided by the current average downward

movement. And in our

final cell we're going to work out the RSI

the formula we use for this is =100

- 100

divided by the relative strength

+ 1. We put brackets around

this sum here

And then we can copy them down to the cells below by clicking on the bottom right hand corner

okay so there we have the RSI indicator

calculated in Excel if you're interested

in using indicators, technical indicators to

backtest your own trading strategies you may want to have a look

at my eBook course "How to Backtest

a Trading Strategy in Excel" there is a link on the screen to

get more information about this. Thank you very much

for more information about trading and backtesting using

Excel please visit:

www.Tradinformed.com