VOLATILITY, THE MASS INDEX AND THE REVERSAL BULGE

摘要

Uncertainty breeds change; that is the underlying tenet of the Mass Index, which posits that an increase in volatility precedes a shift in price trend. Developed by Donald Dorsey, the Mass Index monitors range expansion using the high-low range as a proxy for volatility. The indicator itself does not determine the current, or potential, direction bias. Instead, it suggests when the trend will reverse. Simple price observation or other indicators, such as moving averages, are necessary to determine the current trend.