Ease of Movement
Ease of Movement is a momentum indicator created by Richard W. Arms, Jr. that compares the price change of a security to its volume. Higher readings result from a stock moving on lower volume and lower readings result from a stock moving down on lower volume. Congested areas where volume is high but the price isn't moving much in either direction will result in readings around the 0 line.
Buy and sell opportunities can be spotted whenever the zero line is crossed by the moving average line. This suggests trends are moving into either continuation, consolidation or reversal. Like many oscillators, the ease of movement indicator is prone to false signals if not smoothed or confirmed appropriately.
Where x is the period which must be an integer.
A 14 period ease of movement can be written as follows.
50000000 * AVG((H - L) * (H - H1 + L - L1) / (V + (V = 0)), 14)
A 20 period ease of movement can be written as follows.
50000000 * AVG((H - L) * (H - H1 + L - L1) / (V + (V = 0)), 20)
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