Mass Index (MI)
Mass Index (MI) is a forex technical indicator used in technical analysis. Mass Index (MI) Indicator was developed by Donald Dorsey. This indicator is designed to identify changes in direction (reversal) trends by measuring how big the difference between the highest and lowest prices. If the difference is enlarged, the Mass Index will rise. Conversely, if the difference is smaller, then the Mass Index will decline.
To calculate mass index, use the following ways:
1. Calculate the exponential moving average of 9 days difference between the highest and lowest prices.
2. Calculate the exponential moving average 9 days from the results of step 1.
3. The result of step 1 divided by the result of step 2.
4. Total the results of step 3 for 25 periods (eg 25 days).
The Use of Mass Index
According to Dorsey, the most important pattern to note is the change in trend direction is very large (reversal bulge). This reversal bulge occurs when 25-period Mass Index rises above 27.0 and then dropped below 26.5. If this happens, the change in price direction is expected to occur. Overall price trend is not too important to be noticed.
To indicate a sell signal and buy using reversal bulge, the method used is usually a moving average 9-day exponential. If the reversal bulge is detected and its moving average trend down, then comes the buy signal. Conversely, if the reversal bulge is detected and its moving average trend up, then comes the sell signal.
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- Mesa Sine Wave
- Median Price
- McClellan Oscillator
- Mass Index (MI)
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- Linear Regression
- Klinger Oscillator (KO)
- Keltner Channel (KC)
- Kagi Chart
- Intraday Momentum (IMI)
- Ichimoku Kinko Hyo (IKH)
- Historical (Natenberg) Volatility
- Herrick Payoff Index
- Haurlan Index
- Full Stochastic Oscillator