Mass Index

Overview

The Mass Index identifies potential trend reversals by measuring the narrowing and widening of the range between high and low prices, generating a "reversal bulge" signal when the range first expands then contracts. It is a unique contrarian tool for stock and forex traders. Combine Mass Index reversal signals with momentum tools from our indicator guide library for higher-probability entries.

How It Works

Mass Index = Sum of [EMA(9) of (High − Low) / EMA(EMA(9)) of (High − Low)] over 25 periods. When the Mass Index rises above 27 and then falls back below 26.5, it produces a reversal bulge signal. The direction of the reversal depends on the preceding trend and is confirmed by an EMA crossover.

Key Signals

• Mass Index rising above 27 then dropping below 26.5 = reversal bulge alert.
• Combine the bulge signal with a 9-period EMA cross for directional confirmation.
• Mass Index staying below 27 = no reversal signal, trend likely continues.

Common Mistakes

• Trading the bulge signal without directional confirmation — it only warns of a reversal, not the direction.
• Expecting frequent signals — the reversal bulge is a rare but powerful event.
• Confusing the Mass Index with simple range-based indicators like ATR.