The Mass Index MT5 indicator is used as an accurate trading tool to pinpoint trend reversals as they occur on the chart.
That forex indicator is built around the changes between the highest and the lowest prices.
The indicator is displayed in a separate window below the main mt5 trading chart.
It fits all kinds of mt5 timeframes and forex currency pairs.
The default Forex mt5 indicator settings can be modified from the input tab. Feel free to try it with the settings and parameters to fit your preferences. Let’s take a closer look at these inputs below.
First smoothing period – defines the opening smoothing period;
Second smoothing period – defines the secondary smoothing period;
Resulting smoothing period – represents the subsequent smoothing period;
Method – describes the calculation method.
The formula for the Mass Index indicator:
The calculations of the Mass Index mt5 indicator are based on the following formula:
MI = SUM(EMA(HIGH – LOW, First Period) / EMA(EMA(HIGH – LOW, First Period), Second Period), Resulting Period)
How to use the Mass Index:
When a bullish trend occurs, wait until the medium blue line of the Mass Index breaks above the 0.00 level and starts pointing down. It means a reversal is underway, but you will need some technical analysis filter to confirm the entry point.
When a bearish trend occurs, wait till the medium blue line of the Mass Index breaks below the 0.00 level and starts pointing up. It means a reversal is underway, but you will need some technical analysis filter to confirm the entry point.
How to set up the Mass Index mt5 indicator in MT5?
Copy and paste the MI.mq5 or MI.ex5 indicator files into the MQL5 folder of the MetaTrader 5 trading platform.
You can gain access to this folder by clicking the top menu options, which goes as follows:
File > Open Data Folder > MQL5 > Indicators (paste here).
Now go to the left side of your MT5 terminal. In the Navigator, find the gauge name, right-click it, and select Attach to the chart.
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The Mass Index indicator is worth adding to your trading collection but remembers to have realistic expectations. Just like any other technical analysis tool, it cannot provide accurate signals 100% of the time. Thus, this forex indicator provides false signals occasionally. Its performance will vary significantly depending on market conditions. Feel free to develop your trading system based on it.