Mass Index

Definition

Mass index is a form of technical analysis that examines the range between high and low stock prices over a period of time. According to its theory, a reversal of the current trend will likely take place when the range widens beyond a certain point and then contracts.
Developed by Donald Dorsey in the early 1990s.

The Mass Index indicator is used in trending markets to monitor the direction and warn of potential trend changes. It uses a specified range of bars to calculate the exponential averages of the range between the high and low prices for a period of time. Then it calculates and plots an index of these calculations. The Mass Index indicates a possible trend reversal when the Mass Index line crosses above the setup line and then falls below the trigger line. This pattern is known as a reversal bulge.

Default Inputs

SmoothingLength sets the number of bars used for the Mass Index exponential moving average, 9 by default.

SummationLength sets the number of bars used for the second Mass Index exponential moving average, 25 by default.

Setup sets the value signifying a Setup plot of a possible trend reversal, 27 by default.

Trigger sets the value signifying a reversal (reversal bulge) that follows the Setup, 26.5 by default.