Center of Gravity Divergence Indicator

Center of Gravity (COG) Divergence generation III is modern indicator with complex mathematic algorithm (BJF Trading Group innovation). You will see divergenses on the chart and indicator. Arrows painted above/below the open bar and not in the past. You can see when actually you can trade. It is never to late! Signals based on closed bars so the arrows above/below open bar never disappear.

MT4 Indicator Center of Gravity (COG) Divergence - Short explanation

Metatrader Indicator Center of Gravity (COG) Divergence indicates fractal divergence by Center of Gravity (COG) indicator.When divergence appears between Center of Gravity (COG) and the price, it indicates a high probability that the current trend will finish soon. A signal to buy is when a new Low-fractal is formed below the previous one and a corresponding Center of Gravity (COG) value is higher than the previous one. A signal to sell is when a new Up-fractal is formed above the previous one and a corresponding Center of Gravity (COG) value is lower than the previous value. The indicator has a lot of customizable settings.

Center of Gravity Indicator (COG Indicator) - Short Explanation

Center of Gravity Indicator  actually has a zero lag and allows to define turning points precisely. This indicator is the result of Ehler's study of adaptive filters.

The indicator Center of Gravity allows to identify main pivot points almost without any lag. The idea of calculating a center of gravity appeared from the investigation of lags of different filters with the finite impulse response (FIR) in accordance with the relative amplitude of filter coefficients. SMA (Simple Moving Average) is a FIR-filter, in which all coefficients have one and the same value. As a result the center of gravity of SMA is an exact center of the filter. WMA (Weighted Moving Average) is a FIR-filter, in which the last price change is weighted through the filter length, and so on.

The values of weighting are coefficients of filters. Coefficients of WMA filters can be presented as contours of a triangle. The center of gravity is on the 1/3 of the triangle base length. Thus WMA gravity center is shifted to the right with respect to the center of gravitation of SMA of the same length, which gives us a smaller lag. For all examples with FIR filters the sum of productions of coefficients and the price must be divided by the sum of coefficients for preservation of original prices.

The most famous of such FIR filters is Ehlers filter that can be presented the following way:

The Center of Gravity is calculated as Ehlers filter using the formula: