Mass Index

Mass Index Interpretation:

This indicator can detect trend reversals. It is based on the difference between high and low. When volatility increases the this indicator increases and when volatility decreases this indicator decreases too.

To use the Mass Index it is worth plotting an nine day exponential moving average on the price.

A twenty five period indicator becomes interesting when it raises above the 27 level. In this case, one should wait until the indicator falls below the 26.5 level. Then observe the behavior of the moving average. If the moving average rises , a sell signal is produced. If the moving average decreases, then a buy signal is produced.

Mass Index Calculation:

Mass Index = sum[EMA 9 days (high-low) EMA 9 days on (high-low)].

Return from Mass Index to Using Indicators

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