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Mass Index

The mass index serves for finding turns in trends. It is based on changes between maximum and minimum prices. If the amplitude gets wider, the mass index grows; if it gets narrower, the index gets smaller. The mass index was created by Donald Dorcy.

According to D.Dorcy, the most important mass index signal is a special model formed by the indicator. It is called "reversal bulge". It is formed when a 25-period mass index first rises above 27 and then falls below 26,5. In this case a turn of prices can take place, independently of the general trend (the prices may move up or down or fluctuate within a trade corridor).

To find out which signal — for purchase or for sale — the reverse bulge gives, people often use 9-period exponential moving average of prices. When a reverse bulge appears, you should buy if the moving average falls (in hope of a turn) and sell if it grows.


MI = SUM (EMA (HIGH - LOW, 9) / EMA (EMA (HIGH - LOW, 9), 9), N)

SUM — means a sum;
HIGH — the maximum price of the current bar;
LOW — the minimum price of the current bar;
EMA — the exponential moving average;
N — the period of the indicator (the number of values added).

Source Code

Full MQL4 source of Mass Index is available in the Code Base: Mass Index.
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