2010

Tradetime Products

Thomas Yeomans

THE FOREXGRAIL
Outlining an easy to use trading system that can be used with the AccuStrength for ForexSnap
currency strength chart.
 The ForexGrail

Table of contents:

 Personal Note pg. 3- 6 Thomas Yeomans

 Chapter 1 pg. 7-11 The ForexGrail Trading System

 Chapter 2 pg. 12- 17 Introduction to the AccuStrength

 General pg. 18-19 General on the methodology

 Chapter 3 pg. 20-24 Three parts to the trading decision

 Chapter 4 pg. 25 Don’t play with scared money

 Chapter 5 pg. 26-29 The heart of the system is you

 Chapter 6 pg. 30-42 Basics First

 Chapter 7 pg. 43-47 Anchors

 FAQ pg. 48-49 Frequently Asked Questions

 Terms pg. 50-51

Tradetime products and AccuStrength All rights reserved. You must have permission from the author to
reproduce in whole or part.

Copyright 2010 3157313ns ltd.

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 The ForexGrail

A Personal Note

I began using the ForexGrail trading method several years ago while teaching
new traders how trends work, and found that it was everything I needed when used in
combination with a currency meter. It was simple enough for just about anyone to
understand, yet powerful enough to make serious income. I know there is no such thing
as the grail but the people I taught first coined the word and it stuck.

Over the years, there have been some incredible changes to my original
spreadsheet, but the essence of the ForexGrail 2 SMA system stayed true. A 50 SMA
crossing with price will tell you the trend and show an entry for the pair you are
observing. The 5 or 7 will show you when to get out. Sometimes the drawdown at 7 is
too much for highly leveraged traders and they don’t like to give up too much profit in
the hopes it will turn around. A 5 SMA is good for those who like to get in and out
quickly. (Remember, you must have confirmation from the currency strength chart and
make sure its not getting close to a bounce or cross area.

You can start out using the ForexGrail with just about any currency strength
program but make sure it isn’t a “relative strength program”. These do not show
individual currency strength and they’re on all the platforms for free. Also, don’t get an
MT4 meter these days. They are about to be shut down in favor of MT5 plus there are
not enough currency pairs on those free feeds to take a strength measurement
correctly.

Use this simple trading system alongside the currency meter. Become familiar
with its peculiarities. Practice before committing money. The 50/7 is a technical trend
indicator. The 50/5 works just as well in smaller time periods with higher leverages.

The ForexGrail can be used on all platforms and charting packages.

There are two time frames possible. The 4 hour and the 5 minute chart. They
both use the 50 SMA crossing price lines for entry, but you can choose between a 5 or7
SMA for exits on either time chart. You must use a price line and not a bar or candle.

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The system uses the SMA crossing with the Price line as its signal points. It is too
hard to do using bars or candles. The four hour timeframe trader should be using less
than 20 to 1 leverage.

Many clients ask me why I don’t make a program to auto trade the ForexGrail
system. Simply put: They don’t work. In six years I have never seen an exception. A
marvelous program that lets you sit by the pool auto trading does not exist. I have never
seen a single one that worked for more than a short time. They all end up ruining some
poor buggers dream. (And the marketer runs off into the sunset.) Use your common
sense!

The secret to trading professionally is not relying on some magic gizmo to think
for you. If profits and success were as easy as purchasing something over the internet,
our financial system would collapse. Get serious. You are going to be trading up against
some of the smartest and most ruthless traders in the world. Your broker hires the best
talent money can buy. These guys and gals are paid a humongous amount of money to
take you out. They already have a track record of destroying 98% of all new accounts.

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Leverage

When your broker buys money from their banks, they don’t get leverage. In the
big leagues, there is an electronic credit check placed before they can even make a
transaction. However, they offer the people on their intranets five hundred to one. Why
do you think they do that? Winning $1,000.00 in the blink of an eye also goes the other
way.
The vast majority of people I have taught to trade currency strength instead of
price are still around. That’s quite an accomplishment since the average trader last
about 90 days according to sources in the business. The odds are that you have already
felt the wrath of reality that comes from opening a real trading account and finding
yourself on the losing end of trades many more times than not. Don’t despair.

This book will outline a simple to learn system that will put you on the winning
end of trades almost instantly when it is used with the knowledge of individual currency
strengths. You absolutely must follow the signals exactly as they are explained but more
importantly, you have to use common sense. Keep your eyes on the news and events
that may affect the trade you are in or the trade you are considering. I have a great
personal forex bookmarks page with many of the top sites I keep track of. The link is
here: http://tradetime.ca/bookmarks.html

I cannot think for you. I must assume that you have enough common sense not
to follow anything blindly. Learn as much as you can about economics and read
constantly to keep up with what the professionals are talking about. This is a profession
where research and constant education is required. Make it a habit to keep abreast of
developing news events. You should subscribe to a decent news service or use the news
that is provided on your broker platform. These low cost and free types of news sources
are delayed but it isn’t a big deal unless you have a trade on during an important news
release.

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My advice, as the original news trader, is to stay out unless it’s a minor report.
The broker knows what you are doing. It was different in the old days when they hadn’t
caught on to news trading.

As many of the destroyed traders out there will tell you: “BROKERS ARE NOT
STUPID!” Wait out the craziness prior, during, and after a big economic report. You are
on your own but not alone. Thousands of people have been misled into thinking they
can buy the holy grail of easy living through the internet. There is no magic. Anyone
cannot do it. Products that predict the markets are nothing more than crystal balls.

You don’t hear much from losers because people whose lives have been
destroyed give up posting and participating. After losing it all, there is nothing but
disgust for the entire profession. They certainly don’t feel they owe anyone anything
and they know they’ll get flamed and ridiculed if they say anything negative.

As a programmer I have an appreciation of what is possible to do with the data

and platforms back end suppliers give to their broker who in turn gives to me. Are they
doing it things we don’t know about? I don’t know. No one knows. That’s privileged and
proprietary information that is simply not available to anyone. We are on our own to
make intelligent choices. If I could implore the beginners to do anything, it would be to
start out with decent system that will let you follow the trends.

Next, build a knowledge base on how currencies move and why. Study their
individual behavior. Learn how commodities, events, and weather can shape an
individual’s direction. Also, keep your leverage low at first. Use a broker that will allow
you to flex your trade and lot size. Make tiny trades at low leverages and work your way
up.

I wish you the best life has to offer.

Tom Yeomans - September 2010

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 The ForexGrail

Chapter 1

The ForexGrail Trading System

When trading Forex, your objective is to purchase a currency that will be going
up in price and pay for it with one that is expected to go down in price.

You are routinely given a price chart to track the progress of your selected trade
pair. When you trade the EURUSD pair, the chart shows you how one is doing against
another. It doesn’t give you the full picture. Each currency contained in your chosen pair
interacts with seven other major world currencies.

A currency strength chart is a tool that will show you the results of these
interactions.

“A currency strength chart tells you what currencies to use while a trading
system tells you when.”
A currency strength chart, allows a trader to see individual currencies. It tracks
the “behavior” of one currency among dozens of selections. The math behind this
concept is simple enough. Day traders have been measuring strength for decades. Using
a software program to measure and record the interactions of dozens of pairs is the only
way to go when using intraday time periods.

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Integrating bounces and crosses on the currency strength chart to your trading
system.

For the purpose of this discussion, bounces and crosses shown on the currency
strength chart will occur several times a day on all currencies and just about all pairs.
The knowledge of a threshold being crossed should be considered a time of caution. No
matter what you system is telling you, these areas should be approached with caution.

A bounce occurs when a currency hits a certain number on the strength chart. If
it has shown a tendency to keep coming back to this number in the past as measured in
a support and resistance like way, chances are high that it will bounce off that number
and go in the other direction.
Just knowing that a particular area is coming up is not a system by itself but an
important part of your decision making. It says “Be careful around here.”

Crosses.

Should you get a signal to buy on your trading system, and the strength of either
currency in the pair you are about to trade is going to hit a bounce or coming into a
cross area, just put the trade off until you see what occurs after. These point out caution
areas and ignore them at your own risk.

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Basics:

All currency strengths oscillate. They move up through a center point on the
graph and then down again. Currencies observed on their own follow a sine wave
pattern. They do it constantly.

Strength follows a regular rhythm and can keep this pattern for hours and days
through all time frames. This is great for trend system traders. Get used to thinking in
terms of an individual currency.

This sine pattern does not apply to pair charts where one currency is measured against another. This only
applies to currency strength charts.

If an individual currency goes weak, it will go strong again.

This is not like a price chart where the price may never return to the same place again. A
currency strength chart is marked from zero to ten. When the strength goes down on a
currency strength chart, it will always come back up. The price is irrelevant. It’s the rates
of price change among them all.

Currency strength will always follow the sine wave pattern because of the way it
is valued against another currency. Since all currencies on the strength chart follow a
rhythm, you can easily predict the highs and lows.

For Example:

If the US dollar strength has been moving up and down within a tight 3 point range, then
you can safely expect a bounce back down to the lower value at the high and low end of
the 3 point spread. I call these areas “Bounces” The strength of that individual has not
gone higher or lower for a while and each prior time it bounced the other way.
Sometimes the strength will go through the bounce area but more often than not it will
bounce.

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Look at each currency on their own before considering any trades. Spend time
examining each currency strength profile.

Choose a currency moving upwards and one moving down.

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Take a look backwards on the individuals chart. I apply a support and resistance like
marking line on areas that hold a good chance of bouncing. Begin at a high time frame
and work your way down noting the place you put the bounce lines. With a little
practice and using the neat sticky line creator on AccuStrength, you can keep the lines
throughout a wide variety of configurations and comparisons.

Crosses.

Crosses are areas you need to be aware of and prepare for. Just like a bounce area, the
cross between two or more currencies is an area that one of two things occurs at. It
bounces, or runs right through with vigor and you could get caught in a trap or an
opportunity.

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Chapter 2

Introduction to the ForexGrail trading system using the AccuStrength Currency

Strength Meter.

The AccuStrength currency strength meter is a new way of seeing what the
major 8 currencies are doing. The image above shows the AccuStrength 4 currency
strength chart with the Euro and the US dollar strengths being compared to a pair
chart of the EURUSD.

When things are boiled down to essentials, as currency traders, our mission is to
make money trading the difference in strength between 2 currencies contrived as a
pair. The Currency strength chart will show you which currencies are trending over
time. The AccuStrength will let you adjust the timeline and display the individual
currencies one at a time or in combination.

Click in the box for the currency you want to see. You can choose all at once, singularly
or certain combinations. Click again to deactivate it.

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Setting time periods.

The AccuStrength central computers scan all 200 instruments available to it every five
seconds. The strength algorithm is applied and the result is sent to your chart instantly.
The selections refer to how much time can be observed in the window without scrolling.

You can change time periods quickly by right clicking on the chart or use the settings tab
for specific minutes.

I prefer to use the ten hour time period as a starter and move the time down
once a trading opportunity presents itself. I like to observe long term trends using up
to 2 days. You can right click on the chart or go to the settings tab.

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The AccuStrength lets you can scroll back hours or days using the little button in the
bottom right hand side of the interface. Once you click on it, you can then use your
mouse wheel to go back and forward through the prior days.

Time is always shown in your system selection for windows. On the bottom of the chart
you will see a series of minutes displayed.

Line Creation

The AccuStrength has user defined lines that are similar to a pair chart. You can mark
trend and levels using a wide variety of line types and colors.

Another great feature is grid lines to mark out areas clearly. You can adjust their color
and thickness.

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Along the top of the AccuStrength chart is a bar with the exact time, date and currency
value for all the lines represented on the chart at that moment. There is a little ball you
move with your mouse cursor that tells you exactly what time and strength each of the
currencies shown were at that moment and it is displayed on the bar.

Currency box and line colors match.

The little box above is called a tick meter. It displays currency strength numbers six
decimal places beyond the whole number. The formula we use for determining currency
strengths is capable of a high degree of precision. The tick box is for information only. It
changes much too often to be of any use. The chart is needed to see currency strength
trends correctly.

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Logging in is easy. Once you have logged in for the first run, it takes time to collect all
the back data. The second time you login, you only have to receive the data you missed
since it was last turned on. That can take a few minutes. If you get a login message that
refuses you, check the upper and lowercase characters carefully and retry. If it comes
back too quickly, turn the program off and re-launch. Then try again. Sometime copying
and pasting the passes work better.

The next time you login, your passes are kept in memory. If you save your changes
before exiting, everything can be the same as you left it.

Save your favorite settings under a “theme name”. Pick anything you like and it can be
brought back at any time. Always make sure to press “Apply” button after making
changes.

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Your alarms can also be set using this tab. Select whatever parameters you like the
program to signal you at. When that level or threshold is reached, it will ding a system
sound or you can have it play a customized sound. There is also a proximity alarm to tell
you when two or more currencies are coming together. Set the number proximity to the
distance you want to be notified.

As you can see, the AccuStrength has all the controls on two tabs for lines colors and
chart background. Easy and intuitive.

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You can set the thickness of each line using the little number selectors to the right of the
currency color box. You can get more information on features and upgrades by clicking
the “system notices” button at the bottom left hand side of the chart interface.

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Currency strength is everything when trading foreign exchange.

The value of a currency has to be looked at in comparison to how it has been performing
against other world currencies. As foreign exchange traders, we usually watch a chart
showing the difference in value of two. The difference in price between the two
currencies is a spread.

Only Forex uses spread charts. They are not the same as a stock or commodities chart.
That’s why technical analysis doesn’t work very well in Forex. Most of it was designed
for other day trading markets.

In order to trade the Forex market correctly, determining the strength of an individual
on its own is vital.

If you think in terms of strength and weakness, and apply it to an individual currency,
you are thinking like a bank trader. When foreign exchange trading opened the door for
the retail investor less than ten years ago, people began jumping into the high leveraged
community automatically assuming that technical analysis would convert as well. On
the surface you would think so.

Traders from other markets look at one instrument fixed to the US dollar. Forex charts
look at two completely different entities. All through the trading day currencies are
changing in value as perception, news, politics, and economics play out in their
respective countries. One currency may be going up in value due to a piece of great
economic news, while another is losing its value from a political scandal.

The interplay between two currencies is what we are seeing when looking at a forex
price chart. Standard Forex charts track the changes made by two individual currencies.

For example:

A EURUSD chart shows the value of the US dollar against the Euro. If the line goes up, is
the euro really gaining strength or is it reflecting weakness of the US dollar? We don’t
know until we can see several other pair charts containing the EURO and the US dollar
and note their weakness or strength in that pair combination.

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The value of different currencies is always changing. One interesting concept

that is known by all market traders is that each currency will go through a period of
trending, drifting, and then trending. Being able to electronically measure and weigh
each currency as it interacts with others is the secret to trading forex. It’s the edge you
were looking for. We measure the rate of change taking place among all the pairs. Each
currency is dissected and analyzed while its performance is measured among them all.

The use of two moving averages without the currency strength chart, is an
average trading method at best. You observe the strength trends and use them to insure
that they are following price action. This confirmation of individual currency strength
turns an otherwise normal system of entries and exits into a profitable system. It gives
us an edge to make it a great system.

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Chapter 3

Your trading decision should have 3 parts to it.

1. Pick a pair of currencies that are moving toward strength or weakness using the
currency strength chart. Make it a habit to look at each currency on its own and
make notes about each individual before you jump into a trade.

You want to find a currency on its way up and match it with a currency on its way
down. (Don’t pick the strongest and weakest since they may have most likely
already exhausted themselves.)
2.
The 50 SMA in any time frame is a good reference point. There is no need for
fancy ways of measuring the moving average of price. Exponential and Weighted
bah blah really means nothing more than a Simple Moving Average based on the
close price. SMA’s are a simple way to show you when price is crossing a
threshold.

Create a 50 period simple moving average on your broker chart and change
your candles or bars to a line. This is your potential entry spot. You will be
looking for the 50 sma crossing with the price line. This must be combined with
the correct selection of strong and weak currencies according to the strength
chart.

3. Find an entry using a regular Forex pair chart using one that contains the two
currencies you have selected as strong and weak candidates. (If you see that the
Euro dollar has been climbing on the strength chart and the economic news is
pretty good, then you match it with a weak and weakening currency).

Once the 50 crosses price, wait for another six pips to make sure it isn’t just
grabbing a few orders and coming back. Whatever you feel comfortable with is
fine. The market may be slow or fast so adjustments have to be made.

4. Your exit is when the 7 or 5 SMA (simple moving average) crosses the price
line. The faster moving averages allow you to see when the micro trend is over.

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Our job, as day traders is to predict the direction of currencies for a few minutes
to an hour. Not days or weeks. Our trading decisions should only be based on what is
most likely to happen for the amount of time are involved in the trade. Your objective
is to win more trades than you lose. This system, with a fairly bright person using it is
capable of very high win ratios. Don’t let the simplicity fool you.

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PRICE LINE ONLY. ( No candles or bars)

Use the line chart. No bars or candle views. When I talk about a crossing of lines, I am
referring to the price line crossing the moving average line. Not the crossing of moving
averages themselves. Sometimes, coincidentally, all three lines may cross.

5 MINUTE CHART OR USE 1-4 HOUR CHART

The five minute line chart should give you about two day’s view of the action. This
simple system is about consistency. It doesn’t really matter what time frame of chart
you use as long as you are consistent. Don’t float around. Become familiar with one
timeframe and don’t keep changing.

The major difference between the two timeframes is the amount of leverage you should
use. If you are highly leveraged and you use a four hour time frame, you can’t keep your
eye on your account balance. As always I suggest going with minimal leverage if your
account can handle 20 to 1 or less. Watching every tick on a highly leveraged trade will
drive you crazy and the need to drill down to a smaller time chart can’t be stopped. The
less leverage you use, the better. Those who are using hundreds to one leverage can’t
afford to use four hour charts unless they have nerves of steel and a huge trading
account balance.

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50 SMA (Simple moving average on close price)

All charts will have the ability to place a line called a “simple moving average”. Later you
may want to fine tune with other settings but for now, use the simple close price line
and color it blue.

7 SMA ( Simple moving average on close price)

The simple moving average smoothes out the price history line so we can see the
average prices during whatever period you select. I like 7 and 5 depending on the time
period and market action.

Various currency setups happen several times a day on an assortment of pairs. Not all crossings
of the two SMA’s have potential or have the currency strength chart parameters. You must have
confirmed strength meter readings to go with this simple entry system of 2 moving averages.

For example: If you see that the CHF and EUR are moving away from each other
on the strength chart and they appear to be moving steadily, open the corresponding
currency pair chart from your broker and apply the 50 and 7 SMA to it. Maybe is it not
about to happen so you pick another pair ans see if the system conditions match the
strength chart. Not every currency will work every time. You must look for both
conditions to line up before attempting to trade it. This isn’t a race. Take your time and
wait.
Just because you happen to be ready to trade doesn’t mean the market will whip
something up for you. It usually takes time to see a few potential setups taking place.

Start your session looking for currencies getting stronger and weaker:

Find a few potential strong and weak candidates. Keep your eye on them for an
hour or so. You will begin to feel the various trends developing. Don’t stare at charts.
Just keep the strength charts going while you go about your business. When the
conditions show themselves you will be ready. Some days the setups are seen more
often than others.

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Most mornings I usually see two or three. Evenings here in North America I can
expect at least one good setup. You must get used to observing all the various pairs for
this to work. Do not just wait to see if one or two of your favorites will work. You can’t
have favorites in this business. It is important you select the correct pair of currencies
for the trade. Some time periods result in more profit than others.

What moves the Forex market

We are in the world’s most competitive environment. The foreign exchange has
the best people in the world trading against us most of the time. I will assume that
everybody knows the basic terms in forex, such as pip and currency pairs. If not, you
can refer to your broker’s manual to get the mechanics or definitions. The way I
trade does not encourage using anything but a line and two simple moving averages
combined with the currency meter.

STOPS

Many people like to place a stop in case the market goes wild. Take a good hard
look at your broker agreement. As you will see, they do not guarantee stops. They
try to get you out.. but there is no assurance other than their claim that they did
their best and couldn’t. So, in effect, a stop order isn’t worth beans when you need
it the most. Unless you are away from your machine and need something that gives
you some illusion of safety, don’t set your stop too close.

The market moves 15-25 pips routinely. Your exit should be the five or seven
SMA crossing into price, so try to guesstimate how many pips from there you need a
stop order. I suggest 50-100 pips. Professionals with low leverage routinely set 200
pips on intraday trades.

Instead of relying on a set figure for a stop or close out, we use the 7 or the 5
SMA to tell us the trend is most likely over. Of course, during your trade a bit of
economic news may have an effect of the currencies you have in play so In that case,
just take the trade off and wait it out. Don’t make this profession more of a gamble
than it already is. Learn patience and wait till all the ducks line up before jumping
into a trade.

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Chapter 4

Do not play with scared money!

This means that you should never trade with food money. If you can’t afford to
lose it, don’t risk it. Either go to a demo or get the heck out of a business you obviously
can’t afford to be in. If you have ten thousand dollars or more and you have established
credit, use a proper broker you recognize and trust. Until then stay on demo. Those 400
to 1 accounts blow out small accounts in the first couple of trades.

Using a reputable broker that has been operating for many years and qualified to
carry most of the regulated market instruments, should be your first priority. Trust and
reputation will become very important as you begin making money. Your goal must be
to accumulate enough money to open a “proper” trading account with a regulated and
reputable brokerage.

Two moving averages on a five minute chart will give us potential entry and exit
points. I suggest not messing around with the settings at this point. Don’t try to reinvent
the wheel. They work fine, so leave them alone. The technical part of the system is fine
so leave it up to correctly assessing the currency strength chart.

A five minute line chart should easily display 2 days worth of data. That’s usually
enough for day trading. The objective is to trade with your eyes ahead, not backward.
What the chart did prior to you opening a trade has no significance. The past is past. We
are trading the future. The market will show you a variety of patterns in hindsight, but
base your decision on what it is most likely to do in the minutes ahead. It doesn’t matter
where it has been or where it may be going tomorrow. Look for the trend.

You need consistency to succeed. I do not recommend you become a robot. We

all know those magic systems don’t work. You need to apply common sense and a
little sprinkle of intelligence. If you don’t have that, get out now! The smart people will
eat you alive!

Predicting the future market direction of one world currency is enough of a task.
Two is even harder to guess. Using this simple system, I suggest you go with the flow
instead of fighting it. We only need to know which currency is moving toward or away
from a long term trend. It shouldn’t matter which currencies you trade. Only that you
see a clear trending direction developing over a variety of time charts.

Messing with one indicator after another brings nothing consistent into your
day. You need habits. Good ones of course. When you can take a look at a chart and say
to yourself, “Hmm. I have seen this before. I know what to do.” You will be on your way
to making a living in this exciting industry.

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Chapter 5

The heart of the ForexGrail system is you.

If it was the system itself, I could automate it and the money would be in leasing
it to banks. A system is only as good as the person or people following it. It is you that
makes this work. Watch the currency meter for a few days in your chosen time period.
Get used to seeing trends develop.

Forex is speculative trading of derivatives at high leverages.

The people most likely to use huge leverage are beginners. Tiny movements are
magnified several hundred times. You can lose a thousand dollars in the blink of an eye
trading at 200 to 1. Use a broker that will cut your trade size and leverage down.
OandaFX has been doing it for years.

All trading involves risk. You may lose several trades in a row so you need
enough money to ride it out. No system is capable of 10 out of 10 wins consistently. It is
you who will make any system work.

Let’s get back to the moving averages;

Used on their own, two SMA’s (simple moving averages) on a cross will give you
a certain ratio of winners to losers according to what’s going on in the market. It’s a
gamble. The essential ingredient in this system is the currency strength chart . We are
watching (with strength confirmation) for the cross of the price line and the SMA.

The ForexGrail system specifies;

50 SMA for finding entry (when the price line crosses). Exit when the 7 or 5
SMA crosses with the price line.

The fifty period simple moving averages tell me the trend for my time period
(intraday). It tells me the way the market is trending. Basically, what I want from the
fifty line is what the average price has been during fifty, five minute sessions. The
trending direction.

Wait until price line has crossed the 50 to enter a position in the same direction
as the trend. If the line is slanted up then a buy is likely. I like to wait for at least 6 pips
above or below just to make sure it’s not a fake out.

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Think of the moving average in terms of price, not position.

See it in a different light by observing it without the price line at all. Do this on
your charts. Make your chart all black except for the one 50 period moving average.
Look at the price. You are seeing the actual market direction without noise. Candles,
bars. Indicators, colors, are all noise. Just the ups and downs of trend.

The reason I use 50 and 7 SMA’s are the same reason I look at the five minute
charts. I’m used to them. They’re comfortable. They’re familiar. This is very important in
working any system. Get comfortable with it. Find some consistency. I have come to
depend on the five minute chart as my way of seeing differences.

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Set your pair chart to line mode.

All charts allow you to view price as a line instead of a bar or candle. The forex grail
system requires lines to show price as a line. The crossing of price against the simple
moving average. Not the two moving average lines crossing. By the time the two
moving averages cross, the move is over. Those are lagging indicators so I don’t want
entry or exits based on crossing of the averages. It has to cross with price.

With the currency meter confirming an entry, we get a jump on the other traders
waiting for the cross between the two moving averages. Ha.Ha. You’ll see what I mean
now that I mentioned it.

I don’t use bars or candles. I am only interested in the averages of price. Learn to see
the market in terms of averages. The only way to do that properly is by viewing a line
chart. It filters noise and price peaks you wouldn’t have gotten filled at anyway. It
displays at a glance the true average direction a currency is going.

This picture was taken about 20 minutes after the signal to enter was given by the 50.
The price line is white.

Although this system is easy to follow, there are going to be lots of demons like emotion
and lack of patience. You must be strong. Make the determination now, that you will
follow the ForexGrail trading system with the numbers I give you before trying to make
changes. Do not make this out to be any harder than it is.

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It doesn’t matter what charts you use. They are all pretty well the same. Five minute
price line with two moving averages on close.

Don’t use bars or candles for this system. They will shake you out of a trade too
early and cause you to make decisions on emotional triggers. When applying the
ForexGrail system, use the price line. Just use a simple line and get used to seeing it.
Keeping you focused on the line and its impartially (pointing down or pointing up) will
let you make better trading decisions.

Enter 6 pips after the crossing of the 50 line and price. This makes sure it’s not
just noise. It can still go down a bit once you enter. The 50 is showing direction and the 7
will be marking an exit for you once things get going. The picture below shows my entry
after meter confirmations on the morning I am writing this.

I have often said that the candle was a conspiracy to keep beginners from seeing
true market action. They sometimes turn green too early and red too late. Almost like
someone is programming them..hmmm. These fancy things just clutter up what I am
seeing. (I know it will be like weaning a heroin addict to get you to toss them, but you
must not use candles or bars for this system to work properly.) Keep this as simple as
possible in the beginning. Make yourself stick to the rules.

Get used to making trades with your platform in demo. Absolutely, positively, do not
start using real money until you have proven to yourself that the system works and you
have clearly assessed and discussed the risks involved. Once you get a live trading
account fills may not be as good so if you can’t make money with a demo, then you will
not make money with a live account either.

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Chapter 6

Basics first.

We are trading the difference in price between currencies. Charts extract the
difference in price between two separate and quite distinct currencies and then display
the result.

The line going up on any forex chart means a rising price for the currency that
has first position in the pair. EURUSD has the line going up to indicate a higher price for
the euro dollar.

Understanding that we are buying strength or selling weakness of individual

currencies, not pairs, is vital to foreign exchange traders. Come on. Pro’s talk about
individual currencies since they understand each is an entity of its own. There are
countries and economics behind each one. Drill it into your head to think in terms of
individual currencies.

The meter is perfect for reinforcing the idea that each currency has unique
characteristics depending on factors at home and abroad. Strength and weakness is
directly tied to price. Price should reflect absolute strength or weakness.

The US dollar is gaining strength.

This means the line on the EURUSD chart is going down.
The EURO is gaining strength
This means the line is going up on the EURUSD chart.

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But… there is a crucial element involved in the ForexGrail trading system. In the
first statement where I said the US dollar is gaining strength when the line goes
down, I could have said that the Euro is losing strength. Both are correct. For all I
know by watching one chart, the US could be weak or it could be strong…or the Euro
is weaker. I don’t even know if either currency is doing anything at all without
looking at other currencies that may be going strong and weak while pulling this pair
along.

When you give currency trading some deep thought, you have to admit that in essence,
the entire market symbolizes strength and weakness. The ForexGrail system
understands what makes currencies work. Ask any banker. The currency market trends.
Trending among currencies is a characteristic acknowledged by all foreign exchange
experts. All currencies trend at different times.

BE CONTENT WITH TAKING A SMALL BITE OF AN EXCELLENT TREND.

If you are using a small account with a derivatives only broker, this is your
survival tip of the day: “You must enter the market with a steady trend that the
market maker must eventually follow.”

Make your entry following the trend of the “real” currency market, the same one the
broker must follow or lose clients. The idea behind the ForexGrail system is to get in the
habit of making a trade with the trend, not the wave within the trend. The true trend.

If you follow the rules correctly, there will be times the market seems to be
going against you when in fact, it didn’t. You got caught on part of a wave.

Do not pick a volatile time to enter.

PLATFORM PRICES OFTEN VARY WITH THE CHART.

Do not make the mistake of confusing your chart price with what your broker
has posted in the window of the platform. Charts and platform prices often
differ. Make sure to look at the prices on your trading platform before making a
market order trade.

It would be a ring toss trading with just two simple averages. More is needed.
Let’s dissect what the moving averages tell us before going on. The two moving
averages tell us where to enter and where to exit trades based on a simple idea.

The tool I am talking about is the currency strength chart. It tells you what all the
other currencies are doing in relation to others. Remember, you can get fancy
later, just follow the simple system first.

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The ForexGrail system uses the currency meter to identify potential

candidates for each side of a trade. It will alert you to the pairs you should be
looking at in more detail. You can alternatively look at all the pair charts if you
have multiple monitors. The currency chart sorts out the strong from the weak.

The system will require you to watch the trends as they develop for at
least an hour after the European, Asia, or new York openings to make sure of a
direction to hop onto.

It is precisely the tool you need in order to determine when the time is right for
making a trade. The ForexGrail system, takes the work out of looking at more
than two dozen charts to see which currencies are weak and strong. You will
need to bring up the individual charts for your currency pair choice and fine tune
things.

You may find some things repeated. This is a very simple system but several things need to be said several
times to show importance.

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Let’s begin a typical trade session.

Remember I told you about the ring toss using just two simple moving averages
on their own? They can’t do much more than tell us during any particular
moment in time, when a trend seems to be developing among the common
forex pairs. They are very good at letting us see where the trends are.. once we
are able to choose which pairs to keep our eyes on. Here is how I find the best
currencies to trade;

You must take all emotion out of your selection of a currency. Our objective as
forex traders is to extract the maximum profit from a deviation between two
currencies. We trade the spread. It shouldn’t matter what currency you use to
make money. Sticking with a particular pair or choosing one currency over
another based on familiarity is dangerous. Keep your emotional attachment to a
particular currency for shopping.

Let’s get on to finding a pair to trade.

Wanting to know how your chosen currencies are doing in their interaction with
other currency pairs prior to opening a trade is just plain common sense isn’t it?

In the ForexGrail system, you must trade the currencies that are moving away, or
apart from each other at the fast rate. This means your first objective is to find
one currency that is trending towards strength, and match it with a currency that
is trending towards weakness. Makes sense eh? We make our money on spread.

The difference in price between currencies.

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Pick a currency that seems to be gaining or losing momentum at a faster rate

than the others for the time period in which you are trading. If it is early in the
euro session, you will most like see the EURO and GBP moving a little faster than
the others. New York trading session will usually move the US dollar around
faster than the others. If you are trading any of the time periods; (Europe, Asia or
New York)

Watch which ones are most active and consistent for an hour after the opening.

You can do this by looking at a wide range of charts if you happen to have
several monitors or want to take the time to calculate how each of the
currencies involved interact with your selections. Take a look at this picture. It
shows the heart of the ForexGrail system. It is just a simple tool, but it pulls
everything together. It takes the work out of watching multiple screens to find
strength and weakness.

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The currency strength chart is simple in operation.

It looks at all pairs and uses various weighting calculations to find out how,
relative to the others, a particular currency is doing. It measures individual
currency strengths by making comparisons with how that currency interacts with
others. Strength or weakness is not clear using one chart. In order for you to
figure out if the currency is strong, you have to open other charts and see if it
shows strength against other currencies.

The currency strength chart tells you at a glance which currencies are moving
and which charts you should open to take a look. The chart allows us to narrow
down a pair of currencies to trade.

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I need a lot of charts to keep my eyes on so I settle with observing one or two
that contain a strengthening currency and a weakening one. Many brokers have
various pairs available to trade In this limited example I will select the CADJPY
from my pair selection with Oanda.

CADJPY

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Let’s apply a 50 and 7 SMA to this chart of the CADJPY and see what’s
happening.

This will be my first chart open after seeing the numbers on the strength chart. Before I
do anything, I will want to have a look at the CADJPY to determine if it is a candidate for
my pair. First glance tells me the trend is definitely in place but the trigger happened a
few hours ago.

It’s obvious that the Yen has been strengthening against the weaker Canadian
dollar for several hours. In the picture last page, the blue line is my 7 and the
pink is 50 sma. I am using the Oanda chart.

It doesn’t look like the fifty and 7 will be close to each other for some time so I
will look at my next candidate since this potential trade could be exhausted. I am
looking for a small piece of momentum in spread just after it starts and before its
exhausted.

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Do not jump every time you see red and blue. These should alert you to a
developing trend only. They could change. You must watch what the currencies
are doing for a time to get a fix on their true strength or weakness. You are
looking at the meter to provide you with some clues and save time watching all
the pairs. How will you know if the strength is developing or the weakness is
real? Aha.

Look at the 7 and 50 moving average as guides.

I like the one hour view of the 50 SMA to be sure of the long term trend. Going
back to the 5 minute view and the general trend on other currencies, I can time
my entry on the upward or downward, crossing of the 50SMA.

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I am simplifying this example because it doesn’t show the meter which would be indicating this
pair as my best choice and I would have spent some time observing and checking into any
upcoming economic reports affecting the trade I may be in.

I am not looking to get in as soon as the trend becomes directional. You will find
that many times it isn’t possible or preferable to get in on the first part of a
trend. Waiting and biting your nails if necessary, until the exact moment and
taking a little bite of the apple is the way to consistently make profits.

Give your trade some time to work.

Don’t set ten pip stops with the broker. My hard stops would be more than most
people are comfortable with (50-100) but make yours at least three times the
amount you are going to use for a mental stop. Keep stops above 20 with your
demo until you get a feel for where to place them. It takes a bit of ups and down
for the trade to work.

Take a safe piece of the move. 10 pip trades will kill you in fees. They are too
small. A broker makes money on filling orders. Either way. A stop is an order. You
already lost the spread getting into the trade, getting out means you only need
the market to move a couple of pips and you are out. Keep the stops high on
your demo so they can show you what’s best for you when going live.

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I am always looking for the beginning of a trend. I am always watching for the
ones that have already begun for the morning or session. Sometimes the lights
turning red and blue on the meter during the beginning of my trading day may
be showing peaks and not trends. I want to see steadily rising numbers for my
strong choice. High numbers are not what I want to see.
I want to see a climbing number or declining number.

Just picking the highest number isn’t the idea. You want to watch the trends
developing and moving towards weakness or strength,

You are trading the spread between currencies. This means you want to see as
great a difference between two currencies as possible at an increasing rate of
change. That’s the profit. Don’t get attached to one special pair. Sure, if the
signals are there fine, but look around. Experiment with how many pips you can
get with other pairs and how much that translates to in your home currency.

.
The fifty shows direction of trade (long or short) and seven when to exit. (On the
basis of your determination of best currencies according to the meter) I’m saying
that because you can’t just pick any favorite for this to work correctly. Once you
have identified the potential candidates for your trade, you need to get into the
market as soon as possible or your increasing spread between the currencies
begins to slow down.

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Your personal risk factor is the only thing that will determine how much money
you make.

The ForexGrail system can be used in any time period and under most market
conditions..Even economic reports. It is you who will have to see the trend
beginning and take advantage of it by selecting a good counter currency. It’s not
hard to do using a few simple instructions.

To summarize;

You need the currency chart in combination with the two SMA’s. On the next page, let’s
finish this trade. The 7 is being hit and it is time to exit.

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Chapter 7

Anchors

Now I want to add one more concept to this simple moving average system of entry and
exit. Anchors are places where prices, on a five minute chart, have a tendency to
dawdle. This concept was developed several years ago when a friend and I would make
guesses on where the price was most likely to rest, before moving on.

This discovery took a few years to refine but I found that using the OandaFX 5 minute
close price chart, I could clearly see the places where price seemed to be magnetically
attracted by using a horizontal line.

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Below is an example of what happened a little later on that morning.

As you can see, there are certain ranges where the price seems to hang around. I have
them marked as “anchor bands”. I do not try to predict anything more than a likely place
where price will most likely be drawn to.

Anchors are a fuzzy concept and very difficult to explain without showing you in real
time how they work. I will use pictures of the CADJPY I took this morning.

As the image below shows, I begin by counting the amount of times the price seems to
hit an area. I have circled the spots below where activity that morning is shown to
center. I only want some kind of indication of where price will most likely go based on
previous behavior that morning. I am not trying to go back more than a few hours.

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By bringing a horizontal line across, I set the lines where I think the most activity has
taken place. I call them Anchor bands and they are not support, nor resistance. Just
places where the price has shown it is most likely to go..then rest. It may go up and it
may not.

I don’t know for sure what is going to happen once it hits an anchor, but I do know with
a certain amount of confidence that when price is within one of these anchors spots, it
is most likely going to reach that area. As you can see from the pictures, the price is
almost drawn to the anchor band like a magnet. These little jumps can add several pips
to a trade in progress and the anchors will let me hang in a little since I know the price is
most likely to go to the band. What it does after it hits the band, I don’t know. I just
know its most likely to get there.

Anchors allow me to see a good place to get out of a trade. Using the ForexGrail 50/7
SMA along with the currency meter, shows me where to get into and out of a trade, but
using anchor spots let me wring a few extra pips out of each trade.

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Risk

I consider what I do the equivalent of driving a car. Sure, there is risk. But I am in
complete control of the decisions I make concerning my trading money just as I am in
choosing where and how to drive safely.

Watching charts and trading forex is not my lifestyle. I use it to provide me with a
lifestyle. I pick a time when the market is most likely to make a move, and I do some
planning ahead of time to get a little piece of it.

The mechanics of making trades is something you will have to wade through on your
own using your brokers’ manual. Each platform is different but they all follow the same
routines. I usually make market orders with a huge stop limit and possible take profit
targets. A stop is just an order. Keep that in mind.

We are trading currencies folks. We try to extract the difference between separate and
quite distinct currencies. Spread trading the forex market is something people tend to
keep quiet about since their methods and techniques usually involve some indicator
carried over from the other markets where there was no spread against another quite
different entity.

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 Standard charts go up and down; up means good and down means bad. In forex, we can
trade both up and down.

 Currency is not determined by emotions the way much smaller markets like stocks and
indices. Most commodities are ruled by the speculators’ desires and fears. Not foreign
exchange.

 Central banks and professionals determine the price relationship of a currency. What we
see on our forex platforms is a contrived market. There is no single central authority for
foreign exchange prices. Professionals and specialists determine the value of a country’s
currency. We have nothing to do with it. We can only hope to find an opportunity or an
edge by understanding how these folks determine a currency value, which is translated
into a price. We only have to find an opportunity.

Understanding that we buy strength or sell weakness of an individual currency,

not pair, is vital if you hope to become successful and last trading this type of
market.

One more repeat….

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Test the ForexGrail on a demo until you have satisfied yourself it works. Always
keep leverage low and give each trade time to work for you. Do not bail out too fast.
All good trades move up and down. This is normal. Expect to stay in the market a
while depending on the time of day.

Notes:

Don’t just jump in right away. Watch for the steady progression of the numbers
on the meter. They will change all the time but still show you strength and
weakness. Be careful of upcoming economic announcements. Most economic
reports will not move the market out of its prevailing trend unless there is a very big
surprise. Years ago, the market would spike frequently on these reports but they
rarely do now. The big ones to look out for and you are advised to take your profit
and wait them out are reports like Nonfarm payrolls. Big reports can still shake
things up.

I wish you the very best life has to offer.

Tom Yeomans
tom@tradetime.ca

The simple, yet powerful meaning behind this easy to follow system is the use of two
simple indicators along with a powerful tool to make you win consistently. Of course,
not all your trades will be perfect. However, using the ForexGrail system of entry and
exit along with a little common sense, will result in a much higher percentage of winners
than you have been experiencing. Everyone should follow good money management
principles and never risk more than you can afford to lose. Start with a low leverage
trading account and gradually increase the size of your trades.

Common Questions FAQ

How much can you make with ForexGrail?

That's a common question. You can make as much as the market will give you under the
circumstances of the day. Any professional will tell you that the market will give what it
gives as often as it feels like. Everyone is different. All trades are usually unique. If they
weren't we would know we were going to win or lose would we? It’s our unique
collection of skills that will determine what you will make trading.

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Some people begin with a little money and others have a lot. You have to get the silly
notion of making huge amounts of money in Forex when starting out. It’s not going to
happen. The very small amount of people I know who methodically took the time to
develop a good system and ran it several months proving a profit each time ended up
staying in the game for years with me. They found a system, applied good money
management, and didn't jump the gun whenever the market moved a bit.

If you follow a demo system for a few months with good results, you should be able to
carry it out live with approximately the same win/loss ratio. Take your time. This is a
tough business that can pay off well. If you don't run before you learn to walk. Take
conservative trades and never play with scared money.

How often do the setups work?

I can usually see at least two setups a morning. I have often seen a few more at different
times of the day on various currencies. I have no way of knowing what's going to be
happening. All i can say is that when the correct conditions make themselves apparent,
I will be waiting, This is a waiting game folks. You wait for the right conditions or you
don't make a trade. Stick to that, and you'll be fine.

The idea here is to adopt a system and stick to it. Sit down and write out your rules for
entry and exit. You do it for yourself. You will find that just about any tried and true
system will work if people only stuck to it and had an edge.

The ForexGrail is a good system. It becomes an excellent system with the currency
strength chart added to it. If you can't make it work on paper, you don't stand much of
a chance with real money. If you don't have discipline, nothing, even the ForexGrail
won’t work for you.

Copyright 2010 Tradetime Products.

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TERMS OF USE
THIS MATERIAL MAY NOT BE COPIED AND DISTRIBUTED WITHOUT THE EXPRESS
WRITTEN PERMISSION OF ITS PUBLISHER.

Copyright © 2010, Tradetime Products. All Rights Reserved.

No part of this e-book may be reproduced in any form or by any means electronic or
mechanical, including photocopying, recording or by any storage and retrieval system,
without express written permission from its publisher.

The ForexGrail™ System may not be gifted or resold to anyone, under any
circumstances. Only direct customers of TradeTime are allowed to view or be in
possession of this material. If you have purchased The ForexGrail™ System from anyone
other than TradeTime, or someone officially authorized by them as a vendor, the seller
is in violation of terms that they have agreed to and you are in possession of an
unauthorized, illegal copy. If you believe that you have obtained an unauthorized, illegal
copy, or know of someone who has, please contact: tom@tradetime.ca

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The information contained on our website and The ForexGrail™ Trading System e-book
is compiled for the convenience of the site’s visitors and customers of TradeTime,
and is furnished without responsibility for its accuracy.

Trading any financial market involves risk. We at TradeTime are not financial analysts or
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independent professional legal, tax and investment advice as to whether the
information provided is suitable for your particular circumstances.

Failure to seek professional personal advice prior to acting on this information could
lead to you acting contrary to your best interests and could lead to the loss of your
capital. The information provided is meant to be a guide only and it must be
tempered with the investment experience and independent decision making
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Although every attempt has been made to assure accuracy, we do not give any express
or implied warranty as to its accuracy. We do not accept any liability for error or
omission. Examples are provided for illustrative purposes only and should not be
construed as investment advice or strategy.

If hypothetical or simulated performance results are used, these have certain

inherent limitations. Unlike an actual performance record, simulated results do not
represent actual trading. Also, since the trades have not actually been executed, the
results may have been under-or over-compensated for impact. No representation is
being made that any account will or is likely to achieve the profits or losses
similar to any examples shown. Past performance is not indicative of future results.

By visiting this website and/or purchasing this e-book you will be deemed to have
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The information provided in this e-book is not intended for distribution to, or use by any
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requirement within such jurisdiction or country.

Hypothetical performance results have many inherent limitations, some of which are
mentioned below. No representation is being made that any account will or is likely to
achieve profits or losses similar to those shown. In fact, there are frequently sharp
differences between hypothetical performance results and actual results subsequently
achieved by any particular trading program.

One of the limitations of hypothetical performance results is that they are

generally prepared with benefit of hindsight. In addition, hypothetical trading does not
involve financial risk and no hypothetical trading record can completely account for the
impact of financial risk in actual trading.

For example the ability to withstand losses or adhere to a particular trading program in
spite of the trading losses are material points, which can also adversely affect trading
results. There are numerous other factors related to the market in general or to the
implementation of any specific trading program, which cannot be fully accounted for in
the preparation of hypothetical performance results. All of which can adversely affect
actual trading results.

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Copyright 2010 3157313ns ltd.

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