Developed by Donald Dorsey, the Mass Index uses the high-low range to identify trend reversals based on range expansions. In this sense, the Mass Index is a volatility indicator that does not have a directional bias. Instead, the Mass Index identifies range bulges that can foreshadow a reversal of the current trend.
Single EMA = 9-period exponential moving average (EMA) of the high-low differential
Double EMA = 9-period EMA of the 9-period EMA of the high-low differential
EMA Ratio = Single EMA divided by Double EMA
Mass Index = 25-period sum of the EMA Ratio
With 27 and 26 threshold lines.
Comment