Syntax
public MassIndex(Bars bars, int period, int sumPeriod, string description)
public static MassIndex Series(Bars bars, int period, int sumPeriod)
Parameter Description
| bars | The external symbol's Bars object |
| period | Lookback period |
| sumPeriod | Sum period |
Description
The mass index indicator by Donald Dorsey is used to predict trend reversals. It is based on the idea that there is a tendency for reversal when the price range widens, and therefore compares previous trading ranges (highs minus lows).
Mass index is typically calculated by applying a 9-day
EMA and the
EMA of this average (a "double" average), and summing the ratio of these two over a given amount of days (usually 25).
Interpretation
According to Dorsey, a so-called "reversal bulge" is a probable signal of trend reversal (regardless of its direction). Such a bulge takes place when a 25-day mass index reaches 27.0 and then falls to below 26 (or 26.5). A 9-day
EMA is usually used to determine whether the bulge is a buy or sell signal.