Mass Index
The Mass Index is a volatility indicators indicator used in Skyrexio Strategy Builder for volatility assessment and risk management.
Introduction
The Mass Index is a reversal identification indicator that provides trend change signals for both LONG and SHORT strategies through range analysis. This unique indicator analyzes the relationship between high-low ranges to identify potential reversal points by detecting when the range between highs and lows changes significantly, making it excellent for identifying trend exhaustion and potential turning points.
How Mass Index Works
Mass Index was developed by Donald Dorsey to identify potential reversal points by analyzing the relationship between high-low ranges. It uses a 25-period sum of 9-period EMA of high-low range divided by 9-period EMA of that same value, creating a unique volatility-based reversal indicator.
• Reversal identification - Mass Index > 27 suggests potential trend reversal • Trend continuation - Mass Index < 26.5 indicates current trend likely to continue • Volatility expansion - Rising Mass Index shows expanding volatility before reversals • Range analysis - Focuses on price ranges rather than closing prices • Trend exhaustion - Identifies when trending moves are losing momentum
Key Characteristics
Category
Volatility Indicators
Type
Reversal Identification & Trend Exhaustion
Primary Use
Trend reversal signals, continuation confirmation
Timeframe
All timeframes supported (1m to 1M)
Confirmation
Volume, momentum indicators, price action
Strategy Applications
🟢 LONG STRATEGY (Reversal Entry)
Mass Index is excellent for LONG strategies when it signals potential reversal from bearish to bullish trends, particularly when Mass Index exceeds 27 after a downtrend.
Base Entry Order (LONG)
Trigger Type: Once per bar close
Bar TF: 1H
First Condition: Mass Index
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 27
AND
First Condition: Close Price
Timeframe: 1H
Operator: Less Than
Second Condition: Simple Moving Average (50)
Timeframe: 1H
Additional Entry Orders (LONG)
Additional Entry 1: Mass Index reversal confirmation
First Condition: Mass Index
Timeframe: 1H
Operator: Cross Below
Second Condition: Value
Value: 26.5
AND
First Condition: RSI
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 35
OR
Additional Entry 2: Trend continuation setup
First Condition: Mass Index
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 26.5
AND
First Condition: Close Price
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H
AND
First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H
Take Profit Orders (LONG)
Rule 1: Exit condition - Mass Index signals new reversal
First Condition: Mass Index
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 27
AND
First Condition: RSI
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 70
OR
Rule 2: Exit condition - Trend strength exhaustion
First Condition: Mass Index
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (10)
Timeframe: 1H
AND
First Condition: Close Price
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (50)
Timeframe: 1H
OR
Rule 3: Exit condition - Volume decline warning
First Condition: Volume
Timeframe: 1H
Operator: Less Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H
AND
First Condition: Mass Index
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 26
Stop Loss Orders (LONG)
Rule 1: Stop loss - Mass Index breakdown continuation
First Condition: Mass Index
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 27
AND
First Condition: Close Price
Timeframe: 1H
Operator: Less Than
Second Condition: Simple Moving Average (50)
Timeframe: 1H
AND
First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H
OR
Rule 2: Stop loss - Trend breakdown confirmed
First Condition: Close Price
Timeframe: 1H
Operator: Less Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H
AND
First Condition: Mass Index
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 25
OR
Rule 3: Stop loss - Momentum breakdown
First Condition: MACD Line
Timeframe: 1H
Operator: Cross Below
Second Condition: MACD Signal Line
Timeframe: 1H
🔴 SHORT STRATEGY (Reversal Entry)
Mass Index is equally effective for SHORT strategies when it signals potential reversal from bullish to bearish trends, particularly when Mass Index exceeds 27 after an uptrend.
Base Entry Order (SHORT)
Trigger Type: Once per bar close
Bar TF: 1H
First Condition: Mass Index
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 27
AND
First Condition: Close Price
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (50)
Timeframe: 1H
Additional Entry Orders (SHORT)
Additional Entry 1: Mass Index reversal confirmation
First Condition: Mass Index
Timeframe: 1H
Operator: Cross Below
Second Condition: Value
Value: 26.5
AND
First Condition: RSI
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 65
OR
Additional Entry 2: Trend continuation setup
First Condition: Mass Index
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 26.5
AND
First Condition: Close Price
Timeframe: 1H
Operator: Less Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H
AND
First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H
Take Profit Orders (SHORT)
Rule 1: Exit condition - Mass Index signals new reversal
First Condition: Mass Index
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 27
AND
First Condition: RSI
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 30
OR
Rule 2: Exit condition - Oversold bounce warning
First Condition: RSI
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 25
AND
First Condition: Mass Index
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 26
OR
Rule 3: Exit condition - Volume decline warning
First Condition: Volume
Timeframe: 1H
Operator: Less Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H
AND
First Condition: Mass Index
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 26
Stop Loss Orders (SHORT)
Rule 1: Stop loss - Mass Index breakout continuation
First Condition: Mass Index
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 27
AND
First Condition: Close Price
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (50)
Timeframe: 1H
AND
First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H
OR
Rule 2: Stop loss - Trend breakout confirmed
First Condition: Close Price
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H
AND
First Condition: Mass Index
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 25
OR
Rule 3: Stop loss - Momentum breakout
First Condition: MACD Line
Timeframe: 1H
Operator: Cross Above
Second Condition: MACD Signal Line
Timeframe: 1H
Advanced Strategy Combinations
Multi-Timeframe Mass Index Analysis
Higher Timeframe Confirmation:
Daily: Mass Index trend and major reversal signals
4H: Mass Index patterns and volatility expansion
1H: Mass Index execution signals and confirmations
15M: Precise entry timing with momentum
Mass Index Reversal Strategy
Mass Index Continuation Strategy
Setup: Uptrend with Mass Index < 26.5 Signal: Mass Index confirms trend strength Entry: LONG on pullbacks with Mass Index support Target: Trend continuation until Mass Index > 27
Risk Management Guidelines
Mass Index-Based Position Sizing
< 25
Standard (100%)
Low
Trend continuation
25-26.5
Standard (100%)
Normal
Normal trading
26.5-27
Reduced (75%)
Elevated
Caution zone
> 27
Reversal (50%)
High
Reversal only
Mass Index Reliability Factors
✅ Mass Index > 27 in established trends ✅ Volume confirmation of Mass Index signals ✅ Multiple timeframe Mass Index alignment ✅ Momentum divergence with Mass Index signals
Best Practices
For Reversal Strategies
Established trends - Only use Mass Index reversals in clear trending markets
Volume confirmation - Ensure volume supports reversal signals
Momentum check - Look for momentum divergence with Mass Index signals
Multiple timeframes - Confirm Mass Index signals across timeframes
For Continuation Strategies
Low Mass Index - Use Mass Index < 26.5 for trend continuation trades
Trend alignment - Ensure longer timeframes support trend direction
Pullback entries - Enter on pullbacks when Mass Index supports continuation
Exit preparation - Prepare to exit when Mass Index approaches 27
Common Mistakes to Avoid
Ranging markets - Don't use Mass Index signals in sideways markets
No volume confirmation - Always confirm Mass Index signals with volume
Wrong timeframe - Use appropriate timeframe for your trading style
Ignoring trend - Don't ignore the underlying trend when using Mass Index
Market Conditions Analysis
Strong Uptrend
🔴 Low (until Mass Index > 27)
🟢 High (reversal signals)
Strong Downtrend
🟢 High (reversal signals)
🔴 Low (until Mass Index > 27)
Ranging Markets
🔴 Low (unreliable signals)
🔴 Low (unreliable signals)
High Volatility
🟡 Medium (frequent signals)
🟡 Medium (frequent signals)
Trending + Mass Index > 27
🟢 High (reversal potential)
🟢 High (reversal potential)
Related Indicators
Conclusion
Key Takeaways
PRIMARY USE: Trend reversal identification and timing
SECONDARY USE: Trend continuation confirmation when < 26.5
ALWAYS: Confirm Mass Index signals with volume and momentum
REMEMBER: Mass Index > 27 suggests reversal, < 26.5 suggests continuation
Success with Mass Index requires understanding that it's primarily a reversal indicator that works best in trending markets. Use it to identify potential trend changes when Mass Index exceeds 27, and trend continuation when it remains below 26.5.
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