Center of Gravity oscillator provides precise and accurate indications of market corrections with almost zero lag. John Ehler's research on adaptive filters led to the development of this indicator, which was published in Stocks & Commodities magazine 2002.
How to trade using the Center of Gravity oscillator
The Center of Gravity oscillator is similar to the stochastic oscillator, but it has no overbought or oversold areas. It can be used with any currency pair and time frame.
The indicator draws two signal lines: red and blue. The indicator's main signal is the crossing of these lines. -If the red line crosses over the blue one at the topside, we can expect a bullish correction. If the red line crosses over the blue at the topside, we could expect a bearish correction.
Signal divergence can also occur in the Center of Gravity oscillator. If the price forms lower highs or lows, but the Center of Gravity oscillator is trending higher, it signals a divergence signal. We can expect a shift to bullish overall.
Similar to the previous example, if the price keeps forming higher highs/lows, but the Center of Gravity oscillator continues to trend lower, then we can expect a general trend to become bearish. The graph below shows both of these examples.
Formula
CG = -1*NUM/DEN NUM = int (n, i = 0) DEN = int (n, i = 0) , where PRICE = the price i bar (bars) back; PRICE = the current bar price; PRICE = the price 2 bars back.
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How to Download and Install Center of Gravity oscillator
How to install your indicator on MT4 platform:
1. Click on Download button below;
2. Save the file to your computer;
3. Move the .ex4 file into the following folder : meta traderexpertsindicators;
4. Restart your Metatrader platform;
5. Click the “Indicators” button in Metatrader toolbar;
6. Select “Custom”;
7. Search and select “Center of Gravity”;
8. Adjust settings or press OK to add the indicator to your selected chart;
Note: Center of Gravity oscillator is developed by John Ehler and was sent by an AtoZ Markets follower from the United States, Mark. AtoZ Markets does not carry any copyrights over this trading tool.
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