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Syntax

public MassIndex(Bars bars, int period, int sumPeriod, string description)
public static MassIndex Series(Bars bars, int period, int sumPeriod)

Parameter Description

barsThe external symbol's Bars object
periodLookback period
sumPeriodSum 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.

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Used under license from FMR Corp. Copyright 2008 FMR Corp. All rights reserved.


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