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Ease of Movement

Description

The Ease of Movement indicator was developed by Richard W. Arms, Jr., best known for the popular Arms Index and the Equivolume charting method. The Ease of Movement indicator is a product of the Equivolume charting method. The Ease of Movement indicator provides one value (for each time period) representing the price and volume for that period. It calculates the ease at which prices are moving. The larger the price move and the lighter the volume, the easier the movement.

Ease of Movement (EMV) is calculated as follows:

Where:

The raw Ease of Movement values is usually smoothed by a moving average.

Interpretation

The Ease of Movement indicator produces a buy signal when the indicator crosses above the zero center line, indicating that the security is moving upward easily; a sell signal is given when the indicator crosses below the zero center line, indicating that the security is moving downward easily.

High ease of movement values correspond with easy upward price movement whereas low ease of movement values correspond with easy downward price movement. When price movement is small on heavy volume, the ease of movement indicator is zero.