What Is The Ease of Movement Indicator & How To Trade With It

Ease of Movement Indicator

The Ease of Movement indicator is a momentum indicator developed by Richard Arm. This is a volume-based indicator that determines the relationship between the rate of change of a currency pair’s price and its volume. As the name implies, this trading indicator is designed to measure the “ease” of price movement.

What is the Ease of Movement indicator?

The Ease of Movement indicator is an oscillator in the form of a blue curved line that bounces above and below the zero level. A significant positive value above zero indicates that the trend is bullish at a disproportionately low volume. Conversely, a significant negative value below zero indicates that the market is bearish at a disproportionately low volume. This indicator is also used to determine the volume of various assets.

Ease of Movement on chart
Ease of Movement on chart

By default, the Ease of Movement indicator is not available in the MT4 terminal, but it can be downloaded for free from any authentic online resource. Installation of the indicator in MT4 is carried out in a standard way.

Ease of Movement Indicator Characteristics

Type of trading platform – MetaTrader 4

Type of indicator – oscillator

Trading time – around the clock

Timeframe – any

Currency pairs – any

How to use the Ease of Momentum Indicator?

When the market is in an uptrend, the Ease of Movement indicator rises above the zero level, indicating that it is quite strong. Conversely, when the market is in a downtrend, the Ease of Movement falls and falls below zero, implying that the seller’s momentum is strong.

Traders can use the Ease of Movement indicator to confirm a breakthrough in the market. That is, they apply the above concept and generate trading signals for the same.

The figure below shows the graph of the USDCHF currency pair on the daily timeframe. With a bullish break in mid-September, the EOM indicator remained above the zero line for two months, indicating a buy signal.

Ease of Movement zero line
Ease of Movement zero line

At the end of June, the indicator made a bullish breakdown, which indicates a buy signal.

In August, prices held a significant support area, forming a small lateral range and finally, the price broke through the support, and the EOM indicator – the zero line, gave us a sell signal.

Ease of Movement trading strategy

Although the Ease of Movement indicator can be a standalone indicator on which the trading strategy can be built, we could use a 50 simple moving average to try and trade in the direction of the trend.

Ease of Movement buy strategy

  • The EOM line should cross the zero line from bottom to top.
  • The price should be above the SMA (50).
  • Wait for the bullish bar to complete before entry.
  • Place the stop-loss around the swing low area.
  • Exit the trade if the EOM line crosses below the zero line.
Ease of Movement buy setup
Ease of Movement buy setup

Ease of Movement sell strategy

  • The EOM line should cross the zero line from top to bottom.
  • The price should be below the SMA (50).
  • Wait for the bearish bar to complete before entry.
  • Place the stop-loss around the swing high area.
  • Exit the trade if the EOM line crosses above the zero line.
Ease of Movement sell setup
Ease of Movement sell setup

Ease of Movement conclusions

The Ease of Movement indicator combines price with volume to create a momentum indicator based on volume. This indicator is associated with price changes, as it tracks the price of underlying assets. For the most part, traders use this indicator, combining it with other indicators to generate trading signals.

Summing up, we can say that a higher positive value of the EOM indicator indicates a strong uptrend and a positive change in price relative to volume. Conversely, a higher negative value demonstrates a strong downtrend due to an adverse change in price relative to volume.