Ease of movement

Ease of movement ^[1] ( Arms 'movement ease indicator ^[2] ^[3] ; EMV from Arms' Ease of Movement Value ^[4] ) is a technical indicator designed to demonstrate how easily the market price of an instrument changes by linking the correlation of price changes and volume trades ^[1] ^[2] . The lightness indicator developed by Richard W. Arms Jr. ( eng. Richard W. Arms, Jr. ) ^[1] ^[2] .

Content

Method of construction

The Arms movement ease indicator is the ratio of the midpoint movement ^[5] ( English midpoint move ) relative to the previous period to the quotient of the volume and total value of the current bar ^[1] ^[2] :

${\textit {EMV}}_{t}={\frac {{\frac {{\textit {high}}_{t}+{\textit {low}}_{t}}{2}}-{\frac {{\textit {high}}_{t-1}+{\textit {low}}_{t-1}}{2}}}{\frac {{\textit {volume}}_{t}}{{\textit {high}}_{t}-{\textit {low}}_{t}}}},$ ${\ displaystyle {\ textit {EMV}} _ {t} = {\ frac {{\ frac {{\ textit {high}} _ {t} + {\ textit {low}} _ {t}} {2} } - {\ frac {{\ textit {high}} _ {t-1} + {\ textit {low}} _ {t-1}} {2}} {\ frac {{\ textit {volume}} _ {t}} {{\ textit {high}} _ {t} - {\ textit {low}} _ {t}}}},}$

Where ${\textit {EMV}}_{t}$ ${\ displaystyle {\ textit {EMV}} _ {t}}$ - the value of the EMV indicator in the period under consideration; ${\textit {high}}_{t},{\textit {low}}_{t},{\textit {volume}}_{t}$ ${\ displaystyle {\ textit {high}} _ {t}, {\ textit {low}} _ {t}, {\ textit {volume}} _ {t}}$ - accordingly, the maximum, minimum prices and the volume of the current period; ${\textit {high}}_{t-1},{\textit {low}}_{t-1}$ ${\ displaystyle {\ textit {high}} _ {t-1}, {\ textit {low}} _ {t-1}}$ - maximum and minimum prices of the previous period.

For practical analysis, it is customary to use not the indicator line itself, but its moving average . In particular, a 4-day exponential moving average is recommended for short-term analysis ^[2] .

Trading Strategy

From the method of construction it follows that the indicator of ease of movement takes on high values when prices rise with a minimum volume and low when prices fall at a small volume ^[1] . Finding indicator values near zero indicate significant volumes and / or price immobility ^[1] . Based on this, analysts recommend ^[2] :

Buy (open long positions, close short ones) when the EMV rises above zero.
Sell (close long, open short positions) when the EMV moving average drops below zero.

Relationship with other indicators

Richard W. Arms Jr. He is also the author of the Arms Index (TRIN).

Notes

↑ ¹ ² ³ ⁴ ⁵ ⁶ Steven B. Akelis. Ease of Movement // Technical Analysis from A to Z. Full set of trading tools ... from “Absolute width index” to “Candlesticks” = Technical Analysis from A to Z: Covers Every Trading Tool ... from the Absolute Breadth Index to the Zig Zag / Per. from English M. Volkova, A. Lebedeva. - M .: Diagram, 1999. - pp. 108-109. - 376 s. - ISBN 978-5-902537-13-7 , 5-900082-05-09, GRNTI 06.73, BBK 65.526.
↑ ¹ ² ³ ⁴ ⁵ ⁶ Robert Colby. Encyclopedia of Technical Market Indicators = The Encyclopedia of Technical Market Indicators. - M .: "Alpina Publisher" , 2011. - 840 p. - ISBN 978-5-9614-1443-1 .
↑ There are also names: the indicator of ease of movement , freedom of movement , the indicator of freedom of movement , indicator EMV .
↑ More often: English Ease of Movement .
↑ Also: midpoint offset .

[achelis.a.z-1] ¹ ² ³ ⁴ ⁵ ⁶ Steven B. Akelis. Ease of Movement // Technical Analysis from A to Z. Full set of trading tools ... from “Absolute width index” to “Candlesticks” = Technical Analysis from A to Z: Covers Every Trading Tool ... from the Absolute Breadth Index to the Zig Zag / Per. from English M. Volkova, A. Lebedeva. - M .: Diagram, 1999. - pp. 108-109. - 376 s. - ISBN 978-5-902537-13-7 , 5-900082-05-09, GRNTI 06.73, BBK 65.526.

[colbi.2-2] ¹ ² ³ ⁴ ⁵ ⁶ Robert Colby. Encyclopedia of Technical Market Indicators = The Encyclopedia of Technical Market Indicators. - M .: "Alpina Publisher" , 2011. - 840 p. - ISBN 978-5-9614-1443-1 .

[names.ru-3] There are also names: the indicator of ease of movement , freedom of movement , the indicator of freedom of movement , indicator EMV .

[names.en-4] More often: English Ease of Movement .

[midpoint.move-5] Also: midpoint offset .