Definition

The Mass Index (MI) is a specialized tool designed to measure market volatility. Unlike simple volatility metrics, MI is stabilized, offering consistent, comparable values across different time frames. When MI crosses a predefined level known as the "Bulge Threshold," it signals that market volatility has reached an extreme point. This index employs a unique formula involving ratios of exponential moving averages (EMAs) of the high-low range.

Suggested Trading Use

For you, the Mass Index serves as a volatility radar. When the MI crosses above the Bulge Threshold, take note: it's often a clue that a market turning point might be approaching. Extreme volatility can precede significant price moves, and having this information could be valuable for your trading strategy. Use the Mass Index as a supplemental tool to gauge when the market is entering or exiting volatile periods, which may aid you in timing your trades more efficiently.