Here's how to create custom formatting rules in conditional formatting:

1. Select the cells: Choose the range of cells where you want to apply the conditional formatting rule.

2. Go to Conditional Formatting: Navigate to the "Home" tab on the Excel ribbon. In the "Styles" group, click the dropdown arrow next to "Conditional Formatting."

3. New Rule: Several options will appear. Select "New Rule" to create a new custom formatting rule.

4. Format Values Where: This is where you define the condition for applying the format. You'll see a variety of options depending on the type of formatting you want to achieve. Here are some common approaches:

* Format only cells that contain...: Use this for basic text or number comparisons. Within this option, you can choose specific criteria like "equal to," "greater than," "text contains," etc.
* Use a formula to determine which cells to format: This is the option for creating truly custom rules. Enter a formula here that evaluates to TRUE or FALSE for each cell. If the formula returns TRUE, the formatting will be applied.

5. Format: Once you've defined the condition, click the "Format" button to choose the formatting you want to apply when the condition is met. This can include things like:

* Font color or style
* Fill color
* Borders
* Number formatting
* Icon sets
* And more...

6. Click OK: After defining your condition and formatting preferences, click "OK" to apply the custom rule to your selected cells.

By using formulas in conditional formatting, you can create very specific rules based on your needs. For example, you could format cells that contain negative values red, highlight the top 10% of values in a green fill, or use data bars to visually represent the relative value within a range.