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Mass Index Indicator
Introduction to the Mass Index Indicator
The Mass Index (MI) indicator is used as an accurate trading tool to pinpoint trend reversals as they occur on the chart.
That forex indicator is built around the changes between the highest and the lowest prices.
The indicator is displayed in a separate window placed just below the main trading chart.
It fits all kinds of timeframes and currency pairs.
The default indicator settings can be modified directly from the input tab. Feel free to experiment with the settings and parameters to fit your personal preferences. Let’s take a closer look at these inputs below.
First smoothing period – defines the opening smoothing period;
Second smoothing period – defines the secondary smoothing period;
Resulting smoothing period – defines the subsequent smoothing period;
Method – defines the calculation method.
The formula for the Mass Index indicator:
The calculations of the Mass Index indicator are based on the following formula:
MI = SUM(EMA(HIGH – LOW, First Period) / EMA(EMA(HIGH – LOW, First Period), Second Period), Resulting Period)
How to use the Mass Index:
When a bullish trend is taking a place, wait till the medium blue line of the Mass Index breaks above 0.00 level and starts pointing down. It means a reversal is underway, but you will need some technical analysis filter to confirm the entry point.
When a bearish trend is taking a place, wait till the medium blue line of the Mass Index breaks below 0.00 level and starts pointing up. It means a reversal is underway, but you will need some technical analysis filter to confirm the entry point.
How to set up the Mass Index indicator in MT5?
Copy and paste the MI.mq5 or MI.ex5 indicator files into the MQL5 folder of the Metatrader 5 trading platform.
You can gain access to this folder by clicking the top menu options, which goes as follows:
File > Open Data Folder > MQL5 > Indicators (paste here).
Now go to the left side of your MT5 terminal. In the Navigator find the gauge name, right-click it and select Attach to the chart.
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