This article shows how to calculate the RSI indicator developed by J. Welles Wilder. It includes the Excel formulas and a video showing the steps.
The Relative Strength Indicator Indicator
If you are making trading decisions based on the RSI Indicator you will find it interesting to know how the indicator is calculated. The RSI is calculated by taking the average of the most recent gains and dividing it by the average of the most recent losses.
The RSI is widely used to identify changes in the trend and also to confirm the current trend. It is also popularly used to identify divergences; where price makes a new high and the RSI fails to make a new high.
Upward Movement O5 =IF(F5>F4,F5-F4,)
Downward Movement P5 =IF(F5<F4,F4-F5,)
Average Upward Movement Q18 =AVERAGE(O5:O18)
Average Downward Movement R18 =AVERAGE(P5:P18)
Relative Strength S18 =Q18/R18
RSI T18 =100-(100/(S18+1))