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Ease of Movement (EOM)

Also abbreviated as EMV. This indicator was created by Richard Arms and is a volume based indicator. It shows the relationship between the speed of the changing price and the volume. Identifying the amount of volume required (hoe easy it is) to move prices and trend direction.

Usually the Easy of Movement indicator is smoothed with a 14 period Exponential Moving Average (EMA)

Example

Interpretation

A high positive or negative EOM indicates that price is moving upward or downward respectively on low volume.
Low values of the EOM indicates that it takes a lot of volume to change the price. Or that price is not moving.

A Bullish Signal is given when the EOM rises above zero. Because traders are buying.
A Bearish Signal is given when the EOM falls below zero. Because traders are selling.

Calculation

((High + Low)/2 - (Prior High + Prior Low)/2) / ((Volume/100,000,000)/(High - Low))

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