Arms’ Ease of Movement Value

The Arms’ Ease of Movement Value (EMV) is an indicator based on Momentum which qualifies volume and price changes and tries to determine the ease the price is to move up or down.

An optimized moving average crossing above zero is a buy trigger (and is highlighted in green) and crossing below zero is a sell trigger (and highlighted in red).

The DYO uses a simple moving average with a period of 9.

If the EMV exceeds 60% then there is ‘Extreme Optimism’ in the ease. If EMV drops below 40% then there is ‘Extreme Pessimish’ in the ease. Black dots in the sub-window signify these areas.

Formula:

EMV = ((High+Low)/2 – (Prior High+Prior Low)/2) / Volume / (High – Low)

A – Define period for the moving average on Line F.
B – Define a multiplier to counter the magnitude of the volume division on Line D.
D – Implement the EMV formula.
E – Rescale the EMV result by the multiplier. Optionally plots the EMV as a blue line.
F – Create a Simple Moving Average of the EMV and plot as a red line.
H, I – Show the Buy and Sell triggers for when the Average crosses zero.
J, K – Show when the Average is above 60 percent or below 40 percent of the scale.

This study as a template can be downloaded in Ensign 10 from the Ensign web site using the Package feature.

Credits:   Richard W. Arms, Jr.