Charts

Ease of Movement (EOM)

Description

Ease of Movement, developed by Richard W. Arms, Jr., relates price change to volume and is particularly useful for assessing the strength of a trend. High positive values indicate the price is increasing on low volume and strong negative values indicate the price is dropping on low volume.

Formula

The four calculation below are required for Ease of Movement indicator:

\[Distance\;Moved = DM = \left(\frac{High_{current} - Low_{current}}{2}\right) - \left(\frac{High_{previous} - Low_{previous}}{2}\right) \]

\[Box Ratio = BR = \left(\frac{\frac{Volume_{current}}{1,000,000,000}}{High_{current} - Low_{current}}\right) \]

Calculate a one period EOM:

\[EOM_{1} = \frac{DM}{BR}\]

Calculate the moving average where the user can pick from various moving average types:

\[EOM_{n-period MA} = MA(EOM_{1})\]