Ease of Movement: how far price travelled per unit of volume

What it measures

Ease of Movement asks how much volume it took to move price a given distance. A large move on light volume scores high; the same move on heavy volume scores low.

The premise is that moves which happen easily are moves nobody is defending, and that they tend not to hold.

It is one of the few indicators that treats low volume as informative rather than as missing data.

That inversion is worth sitting with. Most volume tools treat heavy volume as confirmation; this one treats it as resistance, on the argument that a move which had to be paid for is a move somebody was defending against.

How it is calculated

These are the steps Basis performs, verified against the published definition.

1. 1

   Compute the distance the bar’s midpoint moved from the previous bar’s midpoint.

2. 2

   Compute a box ratio: the bar’s volume, scaled down, divided by the bar’s high-low range.

3. 3

   Divide the midpoint move by the box ratio.

4. 4

   Smooth the result over the chosen period.

Settings

Fourteen periods is standard. The volume scale factor is cosmetic — it only keeps the output in a readable numeric range and changing it does not change any signal, which makes it the one parameter here safe to ignore entirely.

How to read it

• Above zero means price has been rising with relative ease; below zero, falling with ease.
• A large positive reading during a rally is a warning rather than a confirmation — the advance is meeting no resistance because nobody is trading it.
• Readings near zero during a large move mean the move is being fought, which usually means it matters.
• It is unbounded and instrument-specific, so like Force Index it can only be read against its own recent range rather than against a fixed level.

Where it misleads

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