The Mass Index trading indicator is an indicator of volatility, which uses the expansion or reduction of the range between the maximum and minimum prices to determine a trend reversal. This indicator for MT4 can be downloaded from the link below.
The value of the Mass Index indicator increases as the average price range grows and decreases as the price range narrows. However, since the Mass Index takes into account only volatility, it does not have a directional bias, so it serves only as a signal of possible trend reversals.
The logic of the Mass Index indicator is that volatility often accompanies a change in direction, so a jump in the indicator value should be considered as a possible upcoming trend reversal. However, there must be a certain threshold that distinguishes average volatility from excessive volatility and thus generates an input signal.
The indicator usually fluctuates around level 20. According to the developer of the Mass Index indicator, Donald Dorsey, the most important key point, and the initial level of the Mass Index is when its value exceeds level 27 and then falls below 26.5 (when you use the 25-period sum of the coefficient EMA).
Mass Index Indicator Settings
The Mass Index indicator has only three parameters in the settings:
You can also adjust the levels in a separate tab. Standard values of levels 26.5 and 27 recommended by the indicator developer.
The standard values of EMAPeriod and SecondPeriod are 9. When the value of EMAPeriod is increased, the indicator curve becomes smoother, when the value of SecondPeriod is increased, the values of the Mass Index indicator also increase more often and crosses level 27, respectively, it gives more signals.
When building your own trading strategies, the Mass Index indicator is a very useful technical analysis tool. We recommend using it in conjunction with other trading ideas as an additional confirmation signal. You can find some trading strategies using this indicator in the Strategies section of our website.
Download the Mass Index MT4 indicator from the button below
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