Ease of Movement Indicator (EMV)
Description
Today, in the era of the development of the Internet, many people think about additional earnings on the network. Remote work, freelancing, real money, freedom and comfort – these are the principles that binary options trading will easily give you. That is why trading has become so popular. In addition, only in options can you get the first money in 30 seconds. You build your own work schedule, trade when it is convenient for you, and thanks to mobile applications, you can afford much more – to work anywhere and when it is convenient.
After receiving the first decent income, many traders think about options becoming their main profession. And this is easy to translate into reality: the network has many strategies, descriptions of indicators, as well as ratings of brokers. These useful materials are presented on our resource, and in order to achieve more in trading, visit it as often as possible. Today we will tell you about the Ease of Movement (EMV) indicator.
Ease of Movement Indicator (EMV) is one of the interesting tools of technical analysis, the author of which is considered to be an analyst and trader Richard Arms Jr., better known for the Arms Index indicator. Being indispensable in trading, the indicator shows data on the trading volume of a particular asset in order to change its price. Its difference from other volume instruments is greater independence, which will allow you to trade confidently without any complex settings. It is quite effective and offers high-quality signals for entering the market.
Today, EMV is one of the most popular tools for trading binary options among market players. Its value lies in the fact that it determines the ratio of the speed of price changes and sales volumes, that is, information about what the volume should be in order for prices to move.
Also, the indicator line shows clear information about the trend, the formation of which is possible only if there are significant volumes on the exchange, otherwise the market will not stir up. If a trader sees a high positive value on the chart, this indicates an upward movement of the value with a small volume (uptrend). Strong negative figures indicate that the price is heading down with a low volume (downtrend).
You can see how EMV visually looks on the MetaTrader 4 price chart in the image below. You can also download the MetaTrader 4 platform and work with the indicator.
What is the working principle of the EMV indicator?
EMV is one of the most interesting and effective tools for trading binary options. Born thanks to the expert in the field of technical analysis Richard Arms, this indicator has a lot of advantages. For each trading day, it offers some composite indicator, which is a derivative of price and volume for a specific period of time. This value shows the freedom (ease) of price dynamics.
The indicator of ease of movement can be attributed to oscillators, it shows the ratio of the value of the asset and the size of the contracts produced on it. It also provides information about the level of volume that is needed in order to move the price of an asset in a specific direction.
In trading platforms, the indicator is usually located below the price chart and is a curve that is calculated as the ratio of the volume of an asset to the indicator of the difference between lows and highs. The difference between the indicator and other tools is that the freedom of movement of the price line is determined by the volume and price range: the range is narrower and the larger the volume, the smaller the number of price jumps will be. In options, it is believed that the price rises calmly if the curve is above zero. Accordingly, the price easily decreases if the EOM curve is below zero:
- If its curve moves towards the highs, this indicates that the price has increased on small volumes (for example, small volumes will move the value in the direction of an uptrend).
- If its curve moves towards the lows, this indicates that the price is declining on small volumes (for example, the price dynamics in the direction of the downtrend is calm and it does not need large volumes for this).
EMV calculation formula
EMV = Midpoint Move/ (Volume/ High-Low), where:
Midpoint Move = (today’s high + today’s low)/2 – (yesterday’s high + yesterday’s low)/2
Info taken from website mql5.com
Indicator signals:
Signals for crossing the zero mark:
- If the indicator curve has crossed the zero mark from bottom to top, you can buy a call option,
- If the curve has crossed the zero mark from top to bottom, you can buy a PUT option.
Trend signals:
- If the indicator line is growing, this suggests that the increase in value is accompanied by small volumes of contracts for this asset, which means that we should soon wait for a trend reversal, it is worth buying a put option.
- If the indicator line falls, this clearly indicates that the fall in value is not accompanied by a large volume, which means that a trend reversal should be expected soon, it is worth buying a call option.
- If the indicator line is at zero, this indicates that the trading volume is very low in order to continue the movement, which means that it is better not to make transactions at these moments.
Do I need to install the EMV indicator in your platform?
The ease of movement indicator is a non-standard options trading tool, it is not included in the main list of volume instruments of MetaTrader 4. You can download it quickly and for free here. After that, install the file in MT4, according to the simple and convenient instructions here.
After installation, add the indicator to the price chart, for this:
- Click the “Insert” tab in the top menu of the platform
- Select the tab “Custom” – “Ease of Movement”.
The main parameter of EMV is the period, which you can adjust as necessary for your strategy. Still, in order to avoid false signals, it is better to use a period equal to 14 when setting.
Application of the indicator for binary options
The ease of movement indicator in options is used to obtain information about the ratio of the rate of change in price and market volume. Freedom (ease) of movement is an important technical tool that demonstrates to the investor valuable data on the relationship between the volume and the rate of change in the value of a particular asset.
Using it in binary options is very simple:
- If the indicator curve has crossed the zero mark from bottom to top, you can buy a call option,
- If the curve has crossed the zero mark from top to bottom, you can buy a PUT option.
These signals can bring a decent income to the trader. In addition, it is customary to use the indicator to find trends with it. Despite the fact that EMV produces high-quality signals and is very effective in itself, it is better to combine it with other instruments in trading. Sometimes a moving average, RSI, MACD , etc. are used to smooth out signals (i.e. exclude false signals).
Rules for concluding transactions (screenshots)
Trading when the zero mark is crossed
If the curve of the EMV indicator has crossed the zero mark from bottom to top, you can buy a call option. The image below shows the upward trend of the market in the MetaTrader 4 terminal:
Take advantage of the trend and place a CALL bet with the Olymp Trade broker by going to the olymptrade.com website and preparing an option, indicating:
- Type of option
- Expiration date
- Amount
- Prediction: up
- Next, click the “buy” button and wait for the results of the forecast:
If the EMV curve has crossed the zero mark from top to bottom, you can buy a PAT option. The image below shows the downward trend of the market in the MetaTrader 4 terminal:
Take advantage of the trend and place a PCI bet with the Olymp Trade broker by going to the olymptrade.com website and preparing an option, indicating:
- Type of option
- Expiration date
- Amount
- Prediction: down
- Next, click the “buy” button and wait for the results of the forecast:
Trading with a trend signal
If the EMV indicator line falls, this clearly indicates that the fall in value is not accompanied by a large volume, which means that a trend reversal should be expected soon, it is worth buying a call option. In the image, you can see the expected uptrend after the fall in the MT4 terminal (taking advantage of the trend, place a CALL bet on the olymptrade.com website, the instructions are indicated above):
If the EMV indicator line is growing, this indicates that the increase in value is accompanied by small volumes of contracts for the asset, which means that we should soon expect a trend reversal, it is worth buying a put option. In the image, you can see the expected downtrend after growth in the MT4 terminal (taking advantage of the trend, place a PUT bet on the olymptrade.com website, the instructions are indicated above):
Money management
Money management is the most important basic concept of trading, using it correctly, you can change the efficiency of trading several times. If you need a stable income from options, start first of all by implementing the basics of money management, which will quickly and correctly adjust the management of your personal capital.
Minimum capital: when taking part in transactions, put minimum funds for trading; the value of one option should not exceed 5% of the deposit funds; Participate in the purchase of an option at the lowest price, which will not affect your budget. By applying these simple rules in trading, you will save your capital.
Minimum deposit: when taking part in transactions, be economical with the deposit; when buying an asset, do not transfer all capital; Keep the deposit, given that it will still be needed in further trading. By applying these simple rules in trading, you will save your deposit.
Minimum options: when taking part in transactions, buy the minimum number of options, starting with a minimum of 2-3 assets; This is more true for options beginners; When you become more experienced on the platform, gradually increase the number of assets. By applying these simple rules in trading, you will initially work effectively.
Minimum of emotions: when taking part in transactions, always apply a serious attitude to serious analytical work, where only informed decisions will be needed; It is always necessary to remember that there will be little experience alone, it is your emotions and mood that make your results desirable. By applying these simple rules in trading, you will make trading your main profession.
Expiration
Expiration (from the English Expiration, “ending”) is the moment of completion of the next trading in options, when the results of forecasts become clear to market participants. It is also important and basic in trading. Like money management, it will determine the success of trading. With a conscious attitude to expiration, you can build your own productive strategy, which will bring you closer to the desired result of work on the stock exchange.
Types of options:
- Ultra-short options – 30 seconds – 5 minutes.
- Short-term options – 10 minutes – several hours.
- Medium-term options – a day – a few weeks.
- Long-term options – a month – six months.
Is it allowed to extend the expiration?
It is allowed, not all trading terminals for trading. Realizing during trading that an incorrect forecast has been made, you can simply extend the expiration of the option, reduce possible losses and make a profit.
Expiration rules:
- For new market players, the use of long-term transactions is more suitable, which guarantees stability and minimizes the risk of losses.
- For experienced exchange players, it is more suitable to use the expiration that will make trading and waiting for their completion comfortable. When choosing a broker, find out whether it will be possible to use the expiration extension, which will reduce losses several times.
- For those who came to the stock exchange for the sake of instant income, short-term transactions that give income in 30 seconds are perfect.
- For those who came to the stock exchange for the sake of a stable income, long-term transactions that give calm trading and a good income are perfect.
Expiration in EMV strategies
Expiration at a trend signal
Short-term trading: allowed; EMV generates high-quality market trend signals, offering opportunities for profitable trading; When working with turbo options, remember that they are risky.
Medium-term expiration: allowed; EMV, accurately generating high-quality signals of the market trend, will make trading effective; to protect yourself from false signals, also use additional indicators; With such trading, you will find a minimum of risks.
Long-term expiration: allowed; EMV, accurately demonstrating high-quality market trend signals, makes your trading effective; Use additional trend tools to find reliable signals; Also, for forecasting, you can apply all the knowledge of profitable strategies, fundamental and technical analysis, which will make your long-term trading more profitable.
Expiration at the signal of crossing the zero mark
Short-term trading: allowed; EMV generates high-quality signals when the zero mark is crossed, offering ample opportunities for profitable trading; When working with turbo options, be aware of their risks.
Medium-term expiration: allowed; EMV shows reliable signals when crossing the zero mark, which will make your work effective; to protect yourself from false signals, also use additional indicators; With such trading, you will find a minimum of risks.
Long-term expiration: allowed; EMV generating high-quality signals when crossing the zero mark, makes it possible to get a good profit; Use additional trend tools to find reliable signals; Also, for forecasting, you can apply all the knowledge of profitable strategies, fundamental and technical analysis, which will make your long-term trading more profitable.
Expiration in the “EMV+RSI” strategy
Short-term trading: allowed; EMV and RSI work wonderfully together, offering you a variety of quality signals that, with such express trading, will give you a decent income.
Medium-term expiration: allowed; EMV and RSI work great together, showing you reliable signals, which will make your work more effective; With such trading, you will find a minimum of risks.
Long-term expiration: allowed; EMV and RSI work wonderfully together, showing you reliable signals, which will make trading the most effective; Also, for forecasting, you can apply all the knowledge of profitable strategies, fundamental and technical analysis, which will make your long-term trading more profitable.
When studying the possibilities of trading, pay special attention to the expiration time, which will allow you to quickly reach the desired results. Get acquainted with the convenient terminal of the broker Olympus Trade, which offers a choice of convenient expiration times from 1 minute to 1 hour. Go to the broker’s website olymptrade.com right now and make your trading profitable.
Downloads
MetaTrader 4 (MT4) platform – download.
EMV indicator for the MT4 platform – download.
Tagged with: Binary Options Indicator
