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EASE OF MOVEMENT
Overview
The Ease of Movement indicator shows the relationship between volume and price change. As
with Equivolume charting, this indicator shows how much
volume is required to move prices.
The Ease of Movement indicator was developed Richard W. Arms, Jr., the creator of
Equivolume.
Interpretation
High Ease of Movement values occur when prices are moving upward on light volume. Low Ease
of Movement values occur when prices are moving downward on light volume. If prices are
not moving, or if heavy volume is required to move prices, then the indicator will also be near
zero.
The Ease of Movement indicator produces a buy signal when it crosses above zero,
indicating that prices are moving upward more easily; a sell signal is given when the
indicator crosses below zero, indicating that prices are moving downward more easily.
Example
The following chart shows Compaq and a 14-day Ease of Movement indicator. A 9-day moving
average was plotted on the Ease of Movement indicator.
"Buy" and "sell" arrows were placed
on the chart when the moving average crossed zero.
Calculation
To calculate the Ease of Movement indicator, first calculate the Midpoint Move as shown
below.
Next, calculate the "High-Low" Box Ratio expressed in eighths with the denominator
dropped (e.g., 1-1/2 points = 12/8 or just 12).
The Ease of Movement ("EMV") indicator is then calculated from the Midpoint Move and Box
Ratio.
The raw Ease of Movement value is usually smoothed with a moving average.
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