This is a trading item or a component that was created using QuantShare by one of our members.
This item can be downloaded and used by QuantShare Trading Software.
Trading items are of different types. There are data downloaders, trading indicators, trading systems, watchlists, composites/indices...
You can use this item and hundreds of others for free by downloading QuantShare.
Top Reasons Why You Should Use QuantShare:
Works with US and international markets (stock, forex, options, futures, ETF...)
Offers you the tools that will help you become a profitable trader
Allows you to implement any trading ideas
Exchange items and ideas with other QuantShare users
Our support team is very responsive and will answer any of your questions
We will implement any features you suggest
Very low price and much more features than the majority of other trading software
The Mass Index is an indicator developed by Donald Dorsey; it is used to catch trend reversal points (predict reversals) by comparing the changes in the trading range, which is the high price minus the low price. The Mass Index goes up if there is a considerable movement in the security price; otherwise, the Mass Index goes down.
The Mass Index calculation consists of dividing the exponential moving average of the trading range for a particular bar by the exponential moving average of the exponential moving average of the trading range. The results are then added for a specific number of periods, usually 25.
According to Donald Dorsey, the most important pattern or signal generated by the Mass Index indicator is when its value exceeds 27 and then reduces lower than 26.5, using a 25-period chart. This signal is called 'reverse bulge' and it indicates that a turn in prices is likely.
Because the indicator does not give any indication on the direction of the trend, traders use an exponential moving average (usually a nine period is used) of closing prices to determine whether the 'reverse bulge' signal is bullish or bearish. If the EMA (exponential moving average) is trending up then the trader should take a long position, and if the EMA is trending down then the trader should take a short position.
Trading financial instruments, including foreign exchange on margin, carries a high level of risk and is not suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in financial instruments or foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
