Mass Index: A Range-Based Indicator for Reversal Signals

Summary

The Mass Index is presented as an indicator for searching for trend reversals, using changes in the range between each period's high and low. Its underlying idea is that a widening trading range raises the indicator, while a narrowing range lowers it. The document describes three smoothing periods and a selectable calculation method as inputs.

The calculation sums, over a resulting period, the ratio of a smoothed high-low range to a second smoothing of that same range. This describes the indicator's construction, but the document supplies no threshold for identifying a reversal, example signals, market-specific guidance, or backtest evidence. It therefore explains the formula and intuition without establishing how reliably the indicator forecasts reversals or how it should be combined with other rules.

Key ideas

• The Mass Index uses changes in the high-low range to search for possible trend reversals.
• Wider ranges increase the indicator, while narrower ranges decrease it.
• Its calculation sums a ratio of smoothed ranges across a resulting period.
• The indicator uses first, second, and resulting smoothing periods plus a calculation method.
• The document provides no reversal thresholds or performance evidence.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.