Center of
Gravity is the
channel indicator that appears on the chart of the currency pair channel,
consisting of 5 lines:
- Blue line – middle
line of the channel
- Green line – internal
borders of the channel
- Yellow lines – external
borders of the channel
The distance
between the internal and external borders are in direct dependence on the level
of volatility. The higher the volatility is, the shorter the interval between
boundaries.
Characteristics
of Center of Gravity indicator
- Platform: Metatrader4
- Currency pairs: All pairs
- Trading Time: Around the clock
- Timeframe: Any, recommended H1
and higher
Center of
Gravity indicator is used in channel forex strategies and involves the use of
two types of entry points:
1.
Rebound
from the border of the channel
Prices
rebound from the lower border of the channel open a buy position, the first
take profit set in the middle line of the channel, the second Take Profit – at
the top border of the channel. Stop Loss is placed below of the channel, at a
distance corresponding to the spacing between the green and yellow lines:
2.
Price
crosses the center line of the channel
Signal for
opening a long position is the price crossing the midline of the channel from
the bottom up, to open a short position - from top to bottom. Take Profit and
Stop Loss set at a level of internal boundaries of the channel.
Center of
Gravity indicator has the disadvantage of repainting of the channel, which is
especially pronounced at the younger Time Frames.
