Mass Index was developed by Donald Dorsey in order to catch the trend reversal points. The daily prices movements are used for this purpose. In case the movement is considerable the Mass Index goes up, otherwise if it is slight the Mass Index goes down.The Mass Index is used to warn of a future price reversal. The theory behind the Mass Index is that reversals occur when the price range [high – low] increases (i.e. more volatility).
The components for a Mass Index reversal of trend, “Reversal Bulge” as the creator of the Mass Index, Donald Dorsey refers to it, are listed below:
1. Mass Index rises above the trigger line (set at 26.5) and the setup line (set at 27).
2. Mass Index then falls below the setup line. When the Mass Index falls below the trigger line, then a reversal of the prior trend is expected.
The Mass Index is a useful technical tool that traders can use to time entry into bottoming markets.
sir, plz teach me formula for stock trend index and nifty trend index as published in nifty live charts .com plz send the reply to annian786@yahoo.com thanku
P.Damodar.
Trader nifty