What it is
The idea is simple: a move that happens on light volume met little resistance, while a move that needs heavy volume is being fought. EOM rises when price climbs freely and falls when it drops freely.
The raw scale depends on the market's price and volume, so traders read the side of 0 and the slope rather than a fixed number. On CFDs it uses tick volume.
How it is calculated
1. Distance moved = this candle's midpoint, (high + low) / 2, minus the previous candle's midpoint. 2. Box ratio = (volume / a scale factor) / (high minus low). The scale factor only makes the numbers readable. 3. Raw EOM = distance moved / box ratio. 4. Smooth it with a 14 period moving average.
Settings
| Setting | Default | Range | What it changes |
|---|---|---|---|
| Smoothing | 14 | 1 to 100 | How many candles the raw values are averaged over. Higher gives a steadier line with fewer zero crosses. |
How to read it
How to trade it
- 1
Use a 1 hour gold chart and only look for longs when EOM is above 0.
- 2
Wait for price to pull back to a support level while EOM stays above or returns to 0.
- 3
Enter long when EOM crosses back above 0 and the candle closes above the prior high.
- 4
Stop below the pullback low, for example 8 to 12 points on gold.
- 5
Exit when EOM crosses below 0, or at 2 times the stop.
The long is cancelled if EOM crosses below 0 and stays there for two candles, or price closes below the pullback low.
WickSpeak writes a plain-English reading of Ease of Movement on the live candle: what it is, whether price is moving easily or against effort right now, how to trade it and what would prove it wrong. In Playbook, a condition can check when EOM crosses above or below zero, stays above or below zero, or is rising or falling.
Best markets and timeframes
Works best on 1 hour to daily charts. On gold and index CFDs it rests on tick volume, so it is better as a filter than a precise trigger.
Common mistakes
- Comparing values across markets; the scale depends on price and volume levels.
- Using it unsmoothed, where single candles swing it wildly.
- Reading near 0 as neutral. It often means heavy volume and a contested level.
Works well with
Questions traders ask
What does Ease of Movement measure?
It measures how far price moves relative to the volume needed to move it. High positive values mean price is rising on light volume; high negative values mean it is falling on light volume.
What is the best EOM setting?
14 periods is the common default for the smoothing. Shorter settings react faster but cross 0 more often.
Who created Ease of Movement?
Richard Arms, who also created the Arms Index (TRIN) and Equivolume charts.
Is Ease of Movement a volume indicator?
Yes. It combines price movement with volume, so on forex and CFD markets it uses the tick volume your broker supplies.