Center Of Gravity

The above AUDUSD H1 price chart shows the Center of gravity V3 indicator in action. The indicator shows the SELL zone in RED and the BUY zone in BLUE. Furthermore, the GRAY lines on both sides indicate the best Overbought and Oversold conditions for an entry. Moreover, the GREEN middle line is the center of gravity line.

If the price moves lower and reaches the extreme oversold zone located below the GRAY line and hits the BLUE line. It shows that the prices are oversold and are due for a Bullish reversal. So, forex traders can open a BUY trade with a stop loss below the previous swing low. The best take profit is the GREEN middle line as the Green middle line represents the center of gravity.

Similarly, when the price reaches the extremely overbought zone above the GRAY line and hits the RED line. It indicates that the prices are overbought so forex traders can expect the price to reverse and become Bearish. So, technical traders can enter the market with a SELL position. The best stop loss is above the previous swing high. However, the best take profit is the GREEN middle line as the indicator anticipates that price will always return to the center of gravity line from an extreme overbought condition.

The indicator works well in all intraday charts as well as the daily, weekly, and monthly price charts. However, traders can use the trading signals of the higher time frame zones for directional purposes and use the lower time frame signals for identifying the best entry points.

Conclusion
The Center of gravity V3 indicator for MT4 is a dynamic overbought and oversold indicator. Furthermore, the take-profit levels provided by the indicator help the forex traders to trade with confidence. The forex trading signals are based on overbought and oversold conditions. So, technical traders must use price action to confirm the BUY and SELL trading signals.