#### How to Calculate RSI Indicator in Excel

In this Excel tutorial you will learn how to Calculate RSI Indicator in Excel spreadsheet.

The Relative Strength Index (RSI) is a popular momentum oscillator used to determine whether a stock or other financial instrument is overbought or oversold. The RSI is calculated using a formula that compares the magnitude of recent gains to recent losses, with values ranging from 0 to 100.

Here’s how to calculate the RSI indicator in Microsoft Excel:

- Prepare your data: Make sure your data is organized in a clear and consistent manner, with the closing price of the stock in a column.
- Calculate the average gain: To calculate the average gain, you can use the following formula: =SUM(IF(closing_price>LAG(closing_price),closing_price-LAG(closing_price),0),14)/14. Replace “closing_price” with the range of cells that contain the closing price data.
- Calculate the average loss: To calculate the average loss, use the following formula: =ABS(SUM(IF(closing_price<LAG(closing_price),LAG(closing_price)-closing_price,0),14))/14. Replace “closing_price” with the range of cells that contain the closing price data.
- Calculate the relative strength: To calculate the relative strength, divide the average gain by the average loss: =average gain/average loss.
- Calculate the RSI: To calculate the RSI, use the following formula: =100-100/(1+relative strength).
- Plot the RSI: To plot the RSI, you can create a line chart with the RSI values on the y-axis and the time period on the x-axis.
- Interpret the results: The RSI is used to determine whether a stock or other financial instrument is overbought or oversold. A reading above 70 is considered overbought, while a reading below 30 is considered oversold.

Excel is a powerful tool for backtesting and optimizing trading strategies based on RSI. By historical data analysis and simulation, you can evaluate how your RSI-based strategies would have performed in the past and fine-tune them for future use.

In conclusion, the RSI is a widely used momentum oscillator that provides a quick way to determine whether a stock or other financial instrument is overbought or oversold. By following the steps outlined above, you can calculate the RSI in Microsoft Excel and use it as part of your investment or trading strategy.

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