Mass Index indicator


Mass Index indicator

# Forex indicators , # Practical Forex , # Forex strategies

Mass Index, MI is a technical analysis indicator developed by Donald Dorsey. With some stretch MI can be attributed to the class of trend indicators. The peculiarity is that the Mass Index (MI) does not show the direction of movement, but only serves as an indicator for its reversal. Nevertheless, since moving averages are used to calculate the index value, we will consider it to belong to the trend family.

Also, to calculate the Mass Index (MI), you also need to know the range of price extremes studied by the trading instrument. That is, the difference between the minimum and maximum values of the price of the last candle. If the range expands, MI grows; if it narrows, MI falls.

The main idea when working with the indicator is the intersection of signal levels. It’s not worthwhile to go into details of how and why exactly such values were found for the levels, just keep in mind that if you use the Mass Index (MI) indicator for trading, set the signal levels to 26.5 and 27. Once again, pay attention to the indicator It does not show the direction of movement, but signals a possible reversal. When the MI line breaks through level 27 from the bottom up, and then breaks through 26.5 from the top down, this is a signal to turn. That is, a peak is formed, which is very easy to find on charts and used for work. That is why the indicator is quite popular among traders.

Adding an indicator to MT

The Mass Index (MI) is not included in the standard equipment of the MT4 and MT5 trading platforms. In order to add it, you need to copy the indicator files to the appropriate directory on your computer.

If you have MetaTrader 4. Open C: \ Program Files . Next, find the folder for the files of the trading terminal and open it. Go to the directory … \ MQL4 \ Indicators and copy the file / files Mass Index, MI (Mass Index) there.

If you have a MetaTrader 5. Open C: \ Program Files . Next, find the folder for the files of the trading terminal and open it. Go to the directory … \ MQL5 \ Indicators \ Examples and copy the file / files Mass Index, MI (Mass Index) there.

After that, launch the trading terminal. Click Insert / Indicators / Custom . A list of indicators opens. Select Mass Index, MI.

Option to add the Mass Index (MI) No. 2

Add files as above. Then launch MT. By default, the Navigator window is open on the desktop. Select Mass Index, MI (Mass Index) in it, as shown in the figure and drag it onto the chart of the trading instrument.

Indicator Parameters

Mass Index (MI)

When setting up the Mass Index (MI), you can specify several variables: First EMA Period, Second EMA Period are the parameters of the exponential moving averages by which the dynamics of change are considered. Mass Period is the number of bars over which the range is calculated. First, try trading with the standard settings, as you can figure out the nature of the indicator, you can experiment.

Trading system

Simple trading tactics using the Mass Index (MI)

We will need two technical indicators: Moving Average (any period) and Mass Index, MI (Mass Index).

Deal:

1. The Mass Index (MI) indicator formed the “Hump”, that is, first broke the signal level 27 from the bottom up, and then went below the level of 26.5;

2. If prices are below the Moving Average – we sell, if we buy higher;

3. Set Stop Loss at the level of the Moving Average;

4. Close the transaction when the Mass Index (MI) came close to the level of 26.5.

As you can see, trading on the Mass Index (MI) is extremely simple.

A few simple rules in conclusion

Remember, there are no indicators on Forex that are not mistaken. The Mass Index (MI) indicator, like any other, requires confirmation of its signals. When building your own trading system, use several indicators.

Follow Mani Management. Never in one transaction risk more than 2 percent of your capital. This approach will protect you from ruin and allow you to consistently make money on Forex using the Mass Index (MI).

Follow your trading strategy clearly. If according to the strategy of Mass Index, MI (Mass Index) you need to open a deal – open it, if you record the result – fix it, and it does not matter if you are in the black. Only following the rules of the Mass Index (MI) “from and to” will earn.

The Mass Index (MI) indicator for MT5 can be downloaded here

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