An indicator of “how easily the price moves”, showing whether the price rises (or falls) easily even on light volume.
- Weapon tier
- Standard
- Slots used
- Sub-charts 1/2
- Created by
- Richard W. Arms Jr.
Concept
One line is drawn in a lower panel. It measures how far the middle of each candle (the average of high and low) moved from the previous candle, relative to the volume it took to make that move.
Above 0, the price is rising “lightly”; below 0, it is falling lightly. Near 0, the price is barely moving even with plenty of trading.
- EOM
Charts by TradingView Lightweight Charts™
80 candles with volume, and the EOM line in a lower panel. While the price steps down, EOM stays mostly below 0. At candle 60 (↑) the line moves above 0, the price rises a little and then moves sideways. At the end it falls again. Keyboard: ←/→ to move, +/− to zoom, 0 to see the whole chart.
Even while EOM stayed above 0 the price did not rise much, and at the end the price fell although EOM was still above 0. This chart was picked because the price rose for a while after EOM crossed 0; it does not always happen. Drag the chart sideways with a finger or the mouse to move it, and pinch with two fingers to zoom in. With a keyboard, click the chart, then use ←/→ to move and +/− to zoom.
How it is calculated
Take the candle’s middle = (high + low) ÷ 2 and its difference from the previous candle’s middle (the distance moved).
The “box ratio” = (volume ÷ 100,000,000) ÷ (high − low). It grows with heavy volume and narrow candles — candles that are “heavy” to move. 100,000,000 just scales the numbers to a readable size.
For each candle, take distance moved ÷ box ratio; EOM is the 14-candle simple average of that value.
Parameters
| What it sets | Name in the game | Default | Range |
|---|---|---|---|
| Candles to average | period | 14 | 2 – 100 |
| Number to divide volume by (scaling) | volumeDivisor | 100,000,000 | — |
Trading ideas
Crossing 0: when EOM has been below 0 for a long time and moves above it, it is commonly read as “the rising side has become lighter”. The chart on this page shows that scene.
Quality of a breakout: if EOM is well above 0 as the price rises, it rose easily on little trading; if EOM is near 0, it took a lot of trading to push it up only a little.
Common traps
- On days with very light volume the box ratio is small, so even small moves look large.
- The right value for 100,000,000 depends on the volume units. Watch whether the line is above or below 0 rather than its height.
- None of these are sure signals. Read them together with the trend (lesson 2).
In the game
- “EOM” is a “Standard” weapon and uses 1 of the “Sub-charts” panels (limit 2). Volume in the starting setup already uses 1, so adding it brings it to 2 (0 left).
- When the line goes below 0 somewhere on screen, a dotted zero line is drawn in the panel.
Related indicators and lessons
- Volume Profile — An indicator that shows with horizontal bars which price levels saw the most trading, to find “the prices where many people bought and sold”.
- OBV — An indicator that keeps a running total, adding the volume of up days and subtracting the volume of down days, to show whether trading leaned toward buyers or sellers.
- MFI — An indicator that multiplies price moves by volume to show, from 0 to 100, whether more money has recently flowed in on the buying side or the selling side.
- Volume Oscillator — An indicator that shows how many % the short-term average volume is above (or below) the long-term average, telling you whether trading is heating up or cooling down.
- Volume Ratio — An indicator that shows the volume of recent up days as a % of the volume of down days, telling you whether trading leaned toward buyers or sellers.
- AD Line — An indicator that keeps a running total of each candle’s volume, weighted by where the close ended between the day’s high and low, to show buying pressure (accumulation) and selling pressure (distribution).
- PVT — An indicator that keeps a running total of “% move × volume” for each candle, showing whether volume pushed more on the rising side or the falling side.
- CMF — An indicator that weighs, by volume, whether closes over the last 20 candles mostly ended near the top or the bottom of each day, shown between −1 and +1.
- VWAP — An average-price line that gives more weight to prices from high-volume candles, showing roughly what people paid on average recently.
- Force Index — An indicator that multiplies how far the price moved by volume, showing whether the “force” was behind the rising side or the falling side.
- 1. Reading a single candle
- 4. Volume and volume MA