Question:

I wonder if you could check my formula. I've (attempted to) create a divergence formula of the slope of Ease of Movement (in this case over 15 days) vs the slope of price. I'm trying to identify divergences between price and eom (in this case eom declining (or rising) slower than price). What appears to be happening however is EOM is rising FASTER than price (the opposite of what I'm after). That's ok in a bull market but not what I'm looking for here. Thanks!

PS: The formula for EOM is: (((H+L)/2)-  ((H1+L1)/2))   / ((V/100,000,000) / (H-L))

Here's my slope divergence formula:

(((H+L)/2) -  ((H1+L1)/2))   / ((V/100,000,000) / (H-L)) 15 - (((H+L)/2) -  ((H1+L1)/2))   / ((V/100,000,000) / (H-L))  / 15 <

(C15- C) / 15

AND

(((H+L)/2)-  ((H1+L1)/2))   / ((V/100,000,000) / (H-L))  > 0

So you just use a 1-period Ease of Movement indicator?

Ease of Movement is on a dramatically different scale than price. How do you want to compare how fast the two are rising or falling relative to each other when they are going the same direction? We can't use a percent change because Ease of Movement can cross through zero.

On charts, I typically apply the default which is 14, but I didn't know how to articulate that in this formula. I didn't want to use a 1-day EOM (I think I hadn't realized I was doing so). 

Typically if you have a stock trading at equilibrium, EOM 14 will tend to track price on a daily graph -  more or less depending on volatility and trend.  Sometimes it will surge ahead, sometimes hold back and those divergences can indicate strength or weakness.  So, the formula was intended to identify issues where the slope of eom is diverging (negatively) from price. That's why I used

price slope > eom slope  -- to (hopefully) find those negdivs.

I also stipulate a positive value to eom, knowing that it can be negative.  

PS ( I think I may have identified a problem here though. In order to divide "eom 15 - eom"  by 15, I need to bracket  "eom 15 - eom" ) I've made the correction, below.

((((H+L)/2) -  ((H1+L1)/2))   / ((V/100,000,000) / (H-L)) 15 - (((H+L)/2) -  ((H1+L1)/2))   / ((V/100,000,000) / (H-L))) / 15

An Indicator Formula for the current 14-period Ease of Movement can be written as follows.

50000000 * ((H - L) * (H - H1 + L - L1) / (V + (V = 0)) + (H1 - L1) * (H1 - H2 + L1 - L2) / (V1 + (V1 = 0)) + (H2 - L2) * (H2 - H3 + L2 - L3) / (V2 + (V2 = 0)) + (H3 - L3) * (H3 - H4 + L3 - L4) / (V3 + (V3 = 0)) + (H4 - L4) * (H4 - H5 + L4 - L5) / (V4 + (V4 = 0)) + (H5 - L5) * (H5 - H6 + L5 - L6) / (V5 + (V5 = 0)) + (H6 - L6) * (H6 - H7 + L6 - L7) / (V6 + (V6 = 0)) + (H7 - L7) * (H7 - H8 + L7 - L8) / (V7 + (V7 = 0)) + (H8 - L8) * (H8 - H9 + L8 - L9) / (V8 + (V8 = 0)) + (H9 - L9) * (H9 - H10 + L9 - L10) / (V9 + (V9 = 0)) + (H10 - L10) * (H10 - H11 + L10 - L11) / (V10 + (V10 = 0)) + (H11 - L11) * (H11 - H12 + L11 - L12) / (V11 + (V11 = 0)) + (H12 - L12) * (H12 - H13 + L12 - L13) / (V12 + (V12 = 0)) + (H13 - L13) * (H13 - H14 + L13 - L14) / (V13 + (V13 = 0))) / 14

The 14 period Ease of Movement from one bar ago can be written as follows.

50000000 * ((H1 - L1) * (H1 - H2 + L1 - L2) / (V1 + (V1 = 0)) + (H2 - L2) * (H2 - H3 + L2 - L3) / (V2 + (V2 = 0)) + (H3 - L3) * (H3 - H4 + L3 - L4) / (V3 + (V3 = 0)) + (H4 - L4) * (H4 - H5 + L4 - L5) / (V4 + (V4 = 0)) + (H5 - L5) * (H5 - H6 + L5 - L6) / (V5 + (V5 = 0)) + (H6 - L6) * (H6 - H7 + L6 - L7) / (V6 + (V6 = 0)) + (H7 - L7) * (H7 - H8 + L7 - L8) / (V7 + (V7 = 0)) + (H8 - L8) * (H8 - H9 + L8 - L9) / (V8 + (V8 = 0)) + (H9 - L9) * (H9 - H10 + L9 - L10) / (V9 + (V9 = 0)) + (H10 - L10) * (H10 - H11 + L10 - L11) / (V10 + (V10 = 0)) + (H11 - L11) * (H11 - H12 + L11 - L12) / (V11 + (V11 = 0)) + (H12 - L12) * (H12 - H13 + L12 - L13) / (V12 + (V12 = 0)) + (H13 - L13) * (H13 - H14 + L13 - L14) / (V13 + (V13 = 0)) + (H14 - L14) * (H14 - H15 + L14 - L15) / (V14 + (V14 = 0))) / 14

The difference between the two is a somewhat shorter formula.

50000000 * ((H - L) * (H - H1 + L - L1) / (V + (V = 0)) - (H14 - L14) * (H14 - H15 + L14 - L15) / (V14 + (V14 = 0))) / 14

The 14 period Ease of Movement from 15 bars ago can be written as follows.

50000000 * ((H15 - L15) * (H15 - H16 + L15 - L16) / (V15 + (V15 = 0)) + (H16 - L16) * (H16 - H17 + L16 - L17) / (V16 + (V16 = 0)) + (H17 - L17) * (H17 - H18 + L17 - L18) / (V17 + (V17 = 0)) + (H18 - L18) * (H18 - H19 + L18 - L19) / (V18 + (V18 = 0)) + (H19 - L19) * (H19 - H20 + L19 - L20) / (V19 + (V19 = 0)) + (H20 - L20) * (H20 - H21 + L20 - L21) / (V20 + (V20 = 0)) + (H21 - L21) * (H21 - H22 + L21 - L22) / (V21 + (V21 = 0)) + (H22 - L22) * (H22 - H23 + L22 - L23) / (V22 + (V22 = 0)) + (H23 - L23) * (H23 - H24 + L23 - L24) / (V23 + (V23 = 0)) + (H24 - L24) * (H24 - H25 + L24 - L25) / (V24 + (V24 = 0)) + (H25 - L25) * (H25 - H26 + L25 - L26) / (V25 + (V25 = 0)) + (H26 - L26) * (H26 - H27 + L26 - L27) / (V26 + (V26 = 0)) + (H27 - L27) * (H27 - H28 + L27 - L28) / (V27 + (V27 = 0)) + (H28 - L28) * (H28 - H29 + L28 - L29) / (V28 + (V28 = 0))) / 14

The difference between the current value and the value from 15 bars ago is quite long as no terms are shared by the two formulas.

50000000 * ((H1 - L1) * (H1 - H2 + L1 - L2) / (V1 + (V1 = 0)) + (H2 - L2) * (H2 - H3 + L2 - L3) / (V2 + (V2 = 0)) + (H3 - L3) * (H3 - H4 + L3 - L4) / (V3 + (V3 = 0)) + (H4 - L4) * (H4 - H5 + L4 - L5) / (V4 + (V4 = 0)) + (H5 - L5) * (H5 - H6 + L5 - L6) / (V5 + (V5 = 0)) + (H6 - L6) * (H6 - H7 + L6 - L7) / (V6 + (V6 = 0)) + (H7 - L7) * (H7 - H8 + L7 - L8) / (V7 + (V7 = 0)) + (H8 - L8) * (H8 - H9 + L8 - L9) / (V8 + (V8 = 0)) + (H9 - L9) * (H9 - H10 + L9 - L10) / (V9 + (V9 = 0)) + (H10 - L10) * (H10 - H11 + L10 - L11) / (V10 + (V10 = 0)) + (H11 - L11) * (H11 - H12 + L11 - L12) / (V11 + (V11 = 0)) + (H12 - L12) * (H12 - H13 + L12 - L13) / (V12 + (V12 = 0)) + (H13 - L13) * (H13 - H14 + L13 - L14) / (V13 + (V13 = 0)) + (H14 - L14) * (H14 - H15 + L14 - L15) / (V14 + (V14 = 0)) - (H15 - L15) * (H15 - H16 + L15 - L16) / (V15 + (V15 = 0)) - (H16 - L16) * (H16 - H17 + L16 - L17) / (V16 + (V16 = 0)) - (H17 - L17) * (H17 - H18 + L17 - L18) / (V17 + (V17 = 0)) - (H18 - L18) * (H18 - H19 + L18 - L19) / (V18 + (V18 = 0)) - (H19 - L19) * (H19 - H20 + L19 - L20) / (V19 + (V19 = 0)) - (H20 - L20) * (H20 - H21 + L20 - L21) / (V20 + (V20 = 0)) - (H21 - L21) * (H21 - H22 + L21 - L22) / (V21 + (V21 = 0)) - (H22 - L22) * (H22 - H23 + L22 - L23) / (V22 + (V22 = 0)) - (H23 - L23) * (H23 - H24 + L23 - L24) / (V23 + (V23 = 0)) - (H24 - L24) * (H24 - H25 + L24 - L25) / (V24 + (V24 = 0)) - (H25 - L25) * (H25 - H26 + L25 - L26) / (V25 + (V25 = 0)) - (H26 - L26) * (H26 - H27 + L26 - L27) / (V26 + (V26 = 0)) - (H27 - L27) * (H27 - H28 + L27 - L28) / (V27 + (V27 = 0)) - (H28 - L28) * (H28 - H29 + L28 - L29) / (V28 + (V28 = 0))) / 14

Wow. Thanks for the heavy lifting on this. It doesn't appear to work though. I also tried adding a large positive number to both sides (eom and price)  to obviate the effects of eom venturing into negative territory - to no avail (I don't know if it was sound mathematics, but what the hell). 

I wish this weren't so difficult. Applying the sliders doesn't give reliable results. With the slider, an eom that's moving down quickly is often moving higher. I don't get the logic of that at all.

Do you know any other way to skin this cat ?

Thanks again,

Al

It is a bit complicated and there wouldn't be a way to do this using a formula, but you could try to use stochastics for this.

Try adding two stochastic indicators to the chart with the Periods of both set to something longer than 15 bars (maybe 30) and the %K set to 1. Make sure the settings are identical besides setting the Data Source of one of the stochastics indicators to use you Ease of Movement indicator and leaving the Data Source of the other stochastic as Price History.

How to add an indicator to a chart template
How to edit an Indicator
How to change the data source for an Indicator

Now add two Rate of Change indicators (net instead of percent) to the chart with the Period of both set to 15. You will change the Data Source of one of the ROC indicators to use the stochastic of price and the Date Source of the other ROC indicator to use the stochastic of EoM.

You will probably want to put the two stochastic indicators in the same pane and scale as each other, but you will need to put the two ROC indicators in the same pane and scale as each other.

Indicator Scaling (2:38)

You will now have the ability to click on the ROC indicators to compare them to each other and/or check if they are above or below zero and add them to the same EasyScan.

Create Conditions from Your Chart (5:25)
Building a Scan with Multiple Conditions (7:29)

Thanks Bruce! I'm going to work on that first chance I get - Al

You're welcome.