Description:
The Mass Index Indicator is a technical analysis tool designed to predict trend reversals by analyzing changes in the price range of a financial asset. Donald Dorsey developed this indicator based on the idea that a reversal is likely when the price range expands or contracts significantly over time.
Input Parameters:
- Length: Number of periods used in the calculation.
- EMA: Exponential Moving Average period.
Use Cases:
- Trend Identification: A rising Mass Index above the threshold (typically 27) suggests a potential trend reversal, while a falling Mass Index below the threshold indicates a possible trend continuation.
- Combining the Mass Index Indicator with other indicators for better analysis: To enhance the accuracy of the Mass Index Indicator, traders can combine it with other technical analysis tools like moving averages, RSI, or MACD to confirm the direction of the anticipated reversal.
- Identifying Entry/Exit Points: Traders can use the Mass Index Indicator to identify potential entry points when the indicator suggests a trend reversal and exit points when the indicator signals a trend continuation.
This feature can be used in:
- Market Scanner
- Strategy Tester
- Multi-Factor Alerts
- Smart Checklist
Do you want to learn more? Check out our Learning Center Article.