# Mass Index Indicator

The Mass Index attempts to predict reversals by comparing the trading range (High minus Low) for each period. Reversals are signaled by a bulge in the index line.

The Mass Index was invented by Donald Dorsey.

## Trading Signals

The key signal is a *reversal bulge.* This occurs when the Mass Index
(25 period) rises above 27 and falls back below 26.5.

Calculate a 9 day exponential moving average (EMA) of prices:

**Go long if there is a reversal bulge and EMA points downward.****Go short if there is a reversal bulge and EMA points upward.**

Use ATR Trailing Stops to time your entry and Stop Losses on all trades.

### Example

FedEx with 25 day Mass Index, and 9 day exponential moving average.

Reversal bulges are very infrequent:

- Long signal - Mass index completes a reversal bulge at [1] while the moving average slopes downward. Place a trailing buy-stop above the High of the signal day and move it down above the high of each day until we are stopped in at [L].

## Setup

The default settings are:

- indicator window - 25 days
- upper level - 27.0
- lower level - 26.5

To alter the default settings - Edit Indicator Settings. See Indicator Panel for directions on how to set up an indicator.

## Formula

To calculate the Mass Index:

- Calculate the range for each period:

**High - Low** - Calculate a 9 day
exponential moving average of the range:

**EMA [H - L]** - Calculate a 9 day
exponential moving average of the above:

**EMA ( EMA [H - L] )** - Divide the first: EMA by the second:

**EMA [H - L] / EMA ( EMA [H - L] )** - Add the values for the selected number of periods (normally 25).