Direct Answer
The Center of Gravity oscillator is a John Ehlers indicator that treats the last N prices as weights on a balance beam and finds the balance point. The balance point shifts with the shape of the recent price series and tends to turn before price does. The line oscillates in a narrow band, often re-centered around zero by adding (N + 1) / 2.
Center of Gravity Oscillator: Formula, Meaning, Signals, Examples and How to Use It
How Is Center of Gravity Oscillator Calculated?
The Center of Gravity oscillator is a John Ehlers indicator that treats the last N prices as weights on a balance beam and finds the balance point. The balance point shifts with the shape of the recent price series and tends to turn before price does.
Formula: CG = - sum over i=0..N-1 of ((1 + i) * price[i]) / sum over i=0..N-1 of price[i], with price[0] the latest bar
Inputs:
- Close prices
- Window length N (commonly 10)
Worked example. For four prices of 10, 11, 12 and 13 listed newest first, the center of gravity is -2.6087. The inputs are illustrative numbers, not market data.
Reading it. The line oscillates in a narrow band, often re-centered around zero by adding (N + 1) / 2. Ehlers describes it as turning at or slightly ahead of price turns, and crossings of the line with a one-bar lagged copy are used as turning-point markers.
Limits. The scale depends on N and the output is small and bounded regardless of price movement size. Flat or noisy prices cause frequent crossings without meaning.
What is Center of Gravity Oscillator?
The Center of Gravity oscillator is a John Ehlers indicator that treats the last N prices as weights on a balance beam and finds the balance point. The balance point shifts with the shape of the recent price series and tends to turn before price does.
How to use Center of Gravity Oscillator
The line oscillates in a narrow band, often re-centered around zero by adding (N + 1) / 2. Ehlers describes it as turning at or slightly ahead of price turns, and crossings of the line with a one-bar lagged copy are used as turning-point markers. A reading alone is never a buy or sell signal; it needs context from price structure, volume, volatility and the broader market regime.
Strengths
- Because the weights are fixed integers and the result is divided by the price sum, the output stays between -N and -1 for positive prices.
- The weights 1 to N give recent and older prices a fixed proportion, so the balance point has a plain geometric interpretation.
- Reproducible when the formula and data convention are fixed.
Weaknesses and limitations
- Weights are tied to the bar index, so a change of N reshapes the whole response and not only its sensitivity.
- The raw output sits near a negative constant at the window midpoint, so changes look tiny against the level unless it is re-centered.
- Correlated indicators can create false confidence by repeating the same underlying information.
Editorial and risk note
This page is educational content, not individualized investment advice. It should not imply guaranteed prediction, accuracy or outperformance.
Frequently Asked Questions
Is Center of Gravity Oscillator a buy or sell signal?
No. The line oscillates in a narrow band, often re-centered around zero by adding (N + 1) / 2. The scale depends on N and the output is small and bounded regardless of price movement size. A trade built on it still needs a trigger, an invalidation rule, a position size and realistic execution assumptions.
What is the best setting for Center of Gravity Oscillator?
Center of Gravity Oscillator takes these inputs: close prices; window length N (commonly 10). There is no universal best setting for the tunable ones, so test them across instruments, regimes and out-of-sample periods and favor stable parameter regions over one historical winner.
Can Center of Gravity Oscillator be used by itself?
The scale depends on N and the output is small and bounded regardless of price movement size. Flat or noisy prices cause frequent crossings without meaning. For that reason it is read next to measures of direction, participation, valuation, liquidity and risk, not alone.
Does Center of Gravity Oscillator work on every timeframe?
The calculation (CG = - sum over i=0..N-1 of ((1 + i) * price[i]) / sum over i=0..N-1 of price[i], with price[0] the latest bar) can be run on any bar size, but behavior is not portable: a reading on a five-minute chart describes a very different market window from the same reading on a daily chart. Validate the exact timeframe before relying on it.
Why does Center of Gravity Oscillator give false signals?
Weights are tied to the bar index, so a change of N reshapes the whole response and not only its sensitivity. The raw output sits near a negative constant at the window midpoint, so changes look tiny against the level unless it is re-centered. Lag, noise and regime changes add to this, because market participants react to new information after the reading is calculated.
How should Center of Gravity Oscillator be backtested?
Rebuild Center of Gravity Oscillator from close prices using point-in-time data, write the rules before testing, include delisted securities where relevant, model realistic fills and costs, reserve a validation sample and compare with a simpler baseline.