3 Easy Ways To Calculate Rsi In Excel

The Relative Strength Index (RSI) is a widely used technical indicator in finance that helps investors and traders gauge the magnitude of recent price changes in order to determine overbought or oversold conditions. Calculating the RSI in Excel is a straightforward process that can be accomplished in a few easy steps. In this article, we will explore three methods to calculate the RSI in Excel, each with its own unique approach.

What is RSI?

Before diving into the calculations, it's essential to understand the concept of RSI. The Relative Strength Index is a momentum oscillator that measures the speed and change of price movements. It was developed by J. Welles Wilder Jr. in the 1970s and is commonly used to identify overbought and oversold conditions in financial markets. The RSI is calculated based on the average gain of up days and the average loss of down days over a specified period.

Method 1: Using Excel Formulas

The first method involves using Excel formulas to calculate the RSI. This approach requires you to calculate the average gain and average loss over a specified period, typically 14 days.

Step 1: Create a table with the following columns:

Date	Close Price	Gain	Loss

Step 2: Calculate the gain and loss for each day:

• Gain: =IF(Close Price > Previous Close Price, Close Price - Previous Close Price, 0)
• Loss: =IF(Close Price < Previous Close Price, Previous Close Price - Close Price, 0)

Step 3: Calculate the average gain and average loss over the specified period:

• Average Gain: =AVERAGE(Gain, 14)
• Average Loss: =AVERAGE(Loss, 14)

Step 4: Calculate the RS (Relative Strength) and RSI:

• RS: =Average Gain / Average Loss
• RSI: =100 - (100 / (1 + RS))

Method 2: Using Excel Functions

The second method involves using Excel functions, specifically the AVERAGEIF and IFS functions.

Step 1: Create a table with the following columns:

Date	Close Price	Gain	Loss

Step 2: Calculate the gain and loss for each day using the AVERAGEIF function:

• Gain: =AVERAGEIF(Close Price, ">0", Close Price - Previous Close Price)
• Loss: =AVERAGEIF(Close Price, "<0", Previous Close Price - Close Price)

Step 3: Calculate the average gain and average loss over the specified period using the IFS function:

• Average Gain: =IFS(Gain, ">0", AVERAGE(Gain), 14)
• Average Loss: =IFS(Loss, ">0", AVERAGE(Loss), 14)

Step 4: Calculate the RS and RSI:

• RS: =Average Gain / Average Loss
• RSI: =100 - (100 / (1 + RS))

Method 3: Using a VBA Macro

The third method involves using a VBA macro to calculate the RSI.

Step 1: Open the Visual Basic Editor by pressing Alt + F11 or navigating to Developer > Visual Basic in the Excel ribbon.

Step 2: Create a new module by clicking Insert > Module and paste the following code:

Sub CalculateRSI()
    
    ' Define variables
    Dim dataRange As Range
    Dim closePrice As Range
    Dim gain As Range
    Dim loss As Range
    Dim averageGain As Double
    Dim averageLoss As Double
    Dim rs As Double
    Dim rsi As Double
    
    ' Set data range
    Set dataRange = Range("A1:E100")
    
    ' Calculate gain and loss
    For Each row In dataRange.Rows
        If row.Cells(2).Value > row.Cells(1).Value Then
            row.Cells(3).Value = row.Cells(2).Value - row.Cells(1).Value
        Else
            row.Cells(4).Value = row.Cells(1).Value - row.Cells(2).Value
        End If
    Next row
    
    ' Calculate average gain and loss
    averageGain = Application.WorksheetFunction.Average(dataRange.Columns(3))
    averageLoss = Application.WorksheetFunction.Average(dataRange.Columns(4))
    
    ' Calculate RS and RSI
    rs = averageGain / averageLoss
    rsi = 100 - (100 / (1 + rs))
    
    ' Output RSI value
    Range("F1").Value = rsi
    
End Sub

Step 3: Run the macro by clicking Developer > Macros and selecting CalculateRSI.

Each of these methods offers a unique approach to calculating the RSI in Excel. By following these steps, you can easily calculate the RSI for any stock or financial instrument.

Gallery of RSI Calculation Methods

RSI Calculation Methods

FAQs

Q: What is the RSI calculation formula? A: The RSI calculation formula is: RSI = 100 - (100 / (1 + RS)), where RS is the Relative Strength.

Q: How do I calculate the RSI in Excel? A: You can calculate the RSI in Excel using formulas, functions, or a VBA macro.

Q: What is the best way to calculate the RSI? A: The best way to calculate the RSI depends on your personal preference and level of expertise. Formulas and functions are easy to use, while a VBA macro offers more flexibility and customization options.

We hope this article has helped you understand how to calculate the RSI in Excel. If you have any questions or need further assistance, please don't hesitate to comment below.