mql5/Indicators/MyIndicators/CG_Oscillator_Pro.md

CG Oscillator Professional (Center of Gravity)

1. Summary (Introduction)

The Center of Gravity (CG) Oscillator, developed by John Ehlers, is a unique indicator designed to identify market turning points with essentially zero lag. It is based on the physical concept of the center of gravity of an object.

By treating the prices over a lookback window as weights on a ruler, the indicator calculates the "balance point" of the recent price action. Ehlers observed that this balance point moves in opposition to the price. By inverting the result, he created a smooth oscillator that is in-phase with the price swings, enabling very early identification of potential reversals.

The indicator plots two lines, forming a complete crossover system:

• CG Line (red): The main Center of Gravity oscillator value.
• Signal Line (blue): The CG line delayed by one bar, which acts as a trigger line.

The result is a fast, smooth, and responsive oscillator for timing entries and exits.

2. Mathematical Foundations and Calculation Logic

The CG Oscillator is a FIR (Finite Impulse Response) filter that calculates the position-weighted average of prices over a given period.

Required Components

• Period (N): The lookback period for the calculation.
• Source Price (P): The price series used for the calculation (Ehlers' original work uses the Median Price (H+L)/2).

Calculation Steps (Algorithm)

For each bar, the indicator looks back over the last N periods.

1. Calculate Numerator: Sum the prices, with each price multiplied by its position in the window. The most recent price gets a weight of 1, the next a weight of 2, and so on. \text{Numerator} = \sum_{i=0}^{N-1} (i+1) \times P_{i}
2. Calculate Denominator: Sum the prices over the window without any weighting. \text{Denominator} = \sum_{i=0}^{N-1} P_{i}
3. Calculate Final CG Value: The final value is the negative ratio of the two sums. The negative sign is used to bring the oscillator in phase with the price. \text{CG} = - \frac{\text{Numerator}}{\text{Denominator}}
4. Signal Line Generation: The Signal Line is simply the CG line's value from one bar prior.

3. MQL5 Implementation Details

• Self-Contained Calculator (CG_Oscillator_Calculator.mqh): The entire calculation is encapsulated within a dedicated, reusable calculator class.
• Heikin Ashi Integration: An inherited _HA class allows the calculation to be performed seamlessly on the Median Price of smoothed Heikin Ashi data.
• FIR-based Logic: The CG Oscillator is a non-recursive (FIR) filter. Its calculation at any given bar depends only on the last N prices, giving it a finite "memory."
• Stability via Full Recalculation: The indicator employs a full recalculation on every OnCalculate call to ensure stability and accuracy.

4. Parameters

• Period (InpPeriod): The lookback period (N) for the center of gravity calculation. Ehlers' recommendation is to set this to half the length of the dominant market cycle. A good starting point for most intraday charts is 10.
  • A shorter period makes the indicator faster and more responsive to small swings.
  • A longer period makes the indicator smoother and responsive only to larger swings.
• Source (InpSource): Selects between Standard and Heikin Ashi candles. The Median Price of the selected candle type will be used.

5. Usage and Interpretation

The CG Oscillator is a timing indicator for cycle reversals. Its primary signal is the crossover of its two lines.

Important Note: Unlike many other oscillators, the CG Oscillator does not have a fixed horizontal axis or a meaningful zero line. Its values "float" depending on the absolute price level of the instrument. Therefore, strategies based on zero-line crosses or fixed overbought/oversold levels are not applicable here.

1. Signal Line Crossover (Primary Strategy)

This is the most direct and Ehlers-recommended way to use the indicator.

• Buy Signal: The red CG line crosses above the blue Signal line. This indicates that the market's "balance point" is shifting towards more recent, rising prices, signaling the start of an upswing.
• Sell Signal: The red CG line crosses below the blue Signal line. This indicates the balance point is shifting towards falling prices, signaling the start of a downswing.

2. Use with a Trend Filter (Highly Recommended)

Due to its high responsiveness and "zero-lag" nature, the CG Oscillator can produce many signals in a choppy market. It is most effective when its signals are filtered by the primary trend.

• Uptrend Rule: In a clear uptrend (e.g., price is above a 200-period EMA or a long-period SuperSmoother), only take Buy signals from the CG Oscillator. These signals can be used to time entries at the end of pullbacks.
• Downtrend Rule: In a clear downtrend, only take Sell signals. These signals can be used to time short entries at the end of corrective rallies.

By combining the CG Oscillator's precise timing with a robust trend filter, traders can create a powerful system for entering trades in the direction of the main market momentum.