| The Mass Index is a technical indicator used in trading to identify potential trend reversals by detecting changes in the price range and volatility. Donald Dorsey introduced it in the technical analysis book "The Mass Index" in the early 1990s. The indicator measures the range between high and low prices over a specified period, typically 9 and 25, and then calculates an exponential moving average. The resulting value is then divided by the 25-period EMA to produce the Mass Index. Traders use the Mass Index to identify potential price reversals when the indicator crosses above or below a certain threshold, typically 27. When the Mass Index crosses above 27, it suggests a potential reversal is imminent, while a cross below 26 suggests a potential continuation of the current trend. |
