Ease of Movement performs a similar function toEquivolume charts. It highlights the relationship between volume and price changes and is particularly useful for assessing the strength of a trend. The indicator shows:
- high positive values when prices move upward on light volume;
- high negative values when prices move down on light volume;
- low values if price is not moving or if it takes heavy volume to move prices, signaling distribution or accumulation.
- Coca Cola Corporation plotted with
- Ease of Movement indicator smoothed by a
- 10 day exponential moving average.
1. Go long [L]: Ease of Movement crosses to above zero.
2. Go short [S]: Ease of Movement crosses to below zero.
3. Go long [L]: Ease of Movement crosses to above zero.
4. Go short [S]: Ease of Movement crosses to below zero.
5. Go long [L]: Ease of Movement crosses to above zero.
6. Go short [S]: Note that we are whipsawed more frequently in a ranging market.