The Center of Gravity v3 Metatrader 4 indicator consists of a center line and multiple bands that show oversold and overbought trading zones.
The green lines tell us when the price is considered to be oversold. On the contrary, the red lines tell us when the price is considered to be overbought.
The theory goes that the price will always retrace back to the center line of the indicator. That’s why it’s called “center of gravity.”
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Indicator Chart (GBP/USD H4)
The GBP/USD H4 chart below shows the Center of Gravity v3 forex indicator in action.
Basic Trading Signals
First and foremost, you will need to watch how the Center of Gravity indicator behaves.
If the lines are pointing up, it means the trend goes up. You will buy only.
If the lines are pointing down, it means the trend goes down. You will sell only.
Buy: The price reaches the green oversold lines in the uptrend.
Sell: The price reaches the red overbought lines in the downtrend.
Center of Gravity V3 and Trend Magic Indicator Forex Strategy
This MT4 strategy combines trend direction with entry signals using the Center of Gravity V3 MT4 Forex Indicator and the Trend Magic MT4 Forex Indicator.
The Center of Gravity V3 shows trend direction, where upward-pointing lines indicate a bullish trend and downward-pointing lines indicate a bearish trend.
The Trend Magic indicator adds precise entries with a blue line for buy signals and a red line for sell signals.
Combining both indicators ensures trades are taken only in the direction of the trend, making it effective for M5 and M15 intraday trading.
Buy Entry Rules
- Ensure the Center of Gravity V3 lines are pointing up, confirming an upward trend.
- Wait for a blue line from the Trend Magic indicator to appear.
- Enter a buy trade at the close of the candle when the blue line appears.
- Place a stop loss below the recent swing low or the nearest support level.
- Take profit when the Trend Magic line turns red or the Center of Gravity lines start to turn down.
Sell Entry Rules
- Ensure the Center of Gravity V3 lines are pointing down, confirming a downward trend.
- Wait for a red line from the Trend Magic indicator to appear.
- Enter a sell trade at the close of the candle when the red line appears.
- Place a stop loss above the recent swing high or the nearest resistance level.
- Take profit when the Trend Magic line turns blue or the Center of Gravity lines start to turn up.
Advantages
- Aligns trades with the main trend, reducing the risk of countertrend entries.
- Provides clear entry and exit signals using Trend Magic lines.
- Simplifies decision-making by combining trend direction with momentum-based entries.
- Effective for both M5 and M15 intraday trading.
- Easy to apply across multiple currency pairs without adjustment.
- Helps traders maintain discipline and follow a structured strategy.
Drawbacks
- May produce delayed signals in rapidly changing markets.
- False Trend Magic lines can occur during sideways or low volatility conditions.
- Partial profits may be missed if the trend reverses before target levels are reached.
- Low liquidity pairs may experience slippage, affecting trade performance.
Example Case Study 1
On EURUSD M5, the Center of Gravity V3 lines were pointing up, confirming an upward trend.
A blue line appeared from the Trend Magic indicator.
A buy trade was entered at candle close with a stop loss placed 3 pips below the recent swing low.
Price moved steadily upward, and the trade was closed when the Trend Magic line turned red, gaining a 26 pip gain.
Trend alignment ensured a high-probability entry.
Example Case Study 2
On AUDJPY M15, the Center of Gravity V3 lines were pointing down, indicating a bearish trend.
A red line appeared on the Trend Magic indicator.
A sell trade was entered at candle close with a stop loss set 5 pips above the recent swing high.
Price declined and the trade was closed when the Trend Magic line turned blue, resulting in a 33 pip profit.
Using both trend and signal confirmation helped capture the main move without trading against the trend.
Strategy Tips
- Combine signals with higher timeframe trend confirmation to improve accuracy.
- Use support and resistance levels to refine entries and exits.
- Monitor price action around major news events and avoid taking trades during high volatility spikes.
- Consider using trailing stops to lock in profits while allowing trends to run.
- Focus on trading during active market sessions for better liquidity and faster execution.
- Skip trades if the Trend Magic line appears but the trend is weak or uncertain.
- Adjust stop loss dynamically based on recent swings rather than fixed pip distances.
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Download the “Center of Gravity v 3.mq4” Metatrader 4 indicator
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart pattern indicator
Customization options: Variable (Bars Back, Method, Beginning, Multiplier) Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: Gravity
