Ease of movement
Order flowIntermediate
Ease of movement compares the change in the midpoint of the bar with the volume required to produce it. Richard Arms's indicator rises when price advances on light volume and falls when price declines on light volume. The interpretation is that a move on little volume was easy. A smoothed version is used so one thin bar does not dominate.
Not investment advice. Nothing here is a recommendation to buy or sell anything. Backtests and historical studies are not guarantees, and a rule that worked in one sample can fail in the next. Trading can lose money. Links are for education, not endorsements. Do your own research.
- Rules
- Compute the distance the midpoint moved, scale it by a volume ratio so the reading is comparable across assets, and smooth it, commonly with a 14-period average. A long bias is a positive reading while a trend filter agrees. Exit when the smoothed value crosses back through zero. Do not buy a single unsmoothed spike.
- Where AI fits
- AI can scale the volume term so two markets are not compared on raw share counts, and it can test the zero-cross only as a filter on another entry. It should winsorize volume. A search over the smoothing length needs a holdout.
- Markets
- Stocks and futures with volume.
- Timeframes
- Daily.
- Risks
- Light-volume advances are often illiquidity, not accumulation. The scaling constant in the formula changes the level, so two chart packages can disagree. The indicator lags once smoothed. It is a volume study, and it will not save a thin name.