Preface

The purpose of this training is to help traders using the Forex AI software better understand how to use the AI Wizard™ tool to time their entry and exit of a trade. However, before we get into the heart of the training there are a few reference points we must make clear. When we get into the training, the
reason these references must be absolutely clear in your mind will become very
evident.

First, when we talk about stock traders, we are including people who trade stocks, mutual funds and options. Secondly, when we reference time, we are referring to United States east coast time.

Other than the instruments they are investing in, there are some significant differences in FOREX and stock traders. The main one this training will focus on is their time horizon. A long-term position trade by a FOREX trader may last a
few days to a few weeks. In a newscast we recently heard a FOREX trader state
that the longest currency trade he had ever heard of anyone being in was nine
months.

When using the AI Wizard™ to enter, monitor and exit a trade, the process is exactly the same. The only thing that varies is your time perspective depending on your market and trading style. Therefore, in the training we will
refer to long-term, mid-term, short-term and entry and you can refer to the two
tables to help you define the exact time frames involved.

AIWizard™

The AI Wizard™ is a revolutionary way of timing the entry and exit of a trade. It takes the elements that technical traders have proven over the years to be very effective but displays them, not as multiple graphs that
can be very confusing, but as a single display that is remarkably easy to
understand. These technical elements include moving average comparisons,
relative strength, buying and selling pressure, over bought - over sold
analysis, volatility and more.

The top or green area of the AI Wizard™ indicates a buying zone. The lower or red area indicates a selling zone and the yellow area is a caution zone. The solid line is the closing timeframe price line. The placement of the
yellow line is based on moving average comparisons. The thickness of the yellow
caution zone is determined by the other technical elements. The exact way the
placement of the caution zone and the thickness of the zone are calculated is
the basis of the proprietary algorithm that make the AI Wizard™ unique.

Fig 1. AI Wizard™

The remainder of the AI Wizard™ includes a volume/volatility indicator that shows if the instrument under consideration is trading within a normal average for that equity or currency pair. (Stocks measure volume of
shares traded, currencies measure the volatility of the currency pair). The
other two gauges are a buying and selling pressure indicator which displays if
the equity/currency pair has more buying or selling pressure for the time frame
under consideration and a momentum indicator that displays strength of the
movement over three time-frames.

Fig 2. Volume/Volatility, Buying-Selling Pressure, & Momentum indicators

There is a six-step process to be used in determining whether a trading opportunity exists.

1.	Find a scenario on the entry chart where an equity/currency pair is moving higher when buying long or moving lower when selling short. The equity/currency pair needs to move through the yellow caution zone or bounce off the zone for one time frame. Fig 3. Entry window step 1
2.	Look at the mid-term chart to determine if the trend is going in your direction. Fig 4. Mid-term window step 2 Steps 1 and 2 can be performed in any order. This is a major point of personal preference. The key is they must BOTH be met prior to continuing with the evaluation.
3.	Look at the entry chart again. Monitor the time frame to see if the trend is still going your direction for at least one-half of the time frame. For example, if looking at a 90-minute window, you want at least 45 minutes to elapse. If the trend is still going in your direction, go to step four. Retreating – do not enter Continuing move – good for possible entry Fig 5. Entry window step 3
4.	Check the volume/volatility graph. The arrow should be in the green zone, above 50 and below 125. The arrow should be in the green zone whether buying long or selling short. Fig 6. Volume/volatility graph-step 4
5.	For buying long, the indicator on the buy/sell graph should be to the left or above 50. For selling short, the indicator on the buying/selling graph should be to the right or below –50. Fig 7. Buying – Selling Pressure graph – step 5
6.	Look at the momentum indicator. The graph on the left should be in the green zone for buying long or in the red zone for selling short. The graph in the center should be equal to or slightly more toward the center (0) than the graph on the left. The graph on the right should be equal to or even more toward the center (0) than the graph in the center. Fig 8. Momentum graph – step 6

Steps 1,2 and 3 must all be met in order to identify a potential trading opportunity. With steps 4, 5 and 6, at least two of the steps must be met in order to identify a potential trading opportunity. Meeting all three of the
steps, 4,5, and 6 is even better.

When these six conditions have been met, you must evaluate whether the trading opportunity suits you personally before entering a trade.

Monitoring the Trade

As long as the price line is staying in the green zone for buying long or the red zone for selling short, the AIWizard™ is showing an opportunity stay in the trade. If the price line has moved a sufficient amount to move your
stop loss into the trading zone, you may be stopped out before you reach the
yellow caution zone. More about stops losses will be discussed in the next
section.

Fig 9. Monitor trade on entry window

Stop Losses

When setting a stop loss, you will need to measure the difference between the buying/selling price/pips and the closest limit of the yellow caution zone at the time of entry. Divide that number by 2 to get a suggested stop loss factor.
Go to the opposite side of the caution zone and the stop loss should be set at
the stop loss factor below the caution zone for buying long and above the
caution zone for selling short.

Fig 10. setting stop loss

If a trailing stop is used it can eventually reach a point where it is above the caution zone.

Exiting the Trade

If you have not been stopped out, you have to determine when to exit the trade. If the equity/currency pair goes through the yellow caution zone and closes one time frame, look at the price line. If the price continues to go against you in the second time frame the AI Wizard™ is indicating that this
may be a good time exit the trade. If the price bounces back into the yellow
caution zone or beyond, the AIWizard™ is indicating that this
may be a good time to stay in the trade.

Fig 11. Exiting the trade

Fig 12. confirming exit signal

If the price line continues in the zone that was opposite of your trade, pay close attention to buying/selling pressure and momentum graphs. If they move into the color of the zone that the price line currently is in, the AI Wizard™ is indicating that this
may be a good time to exit the trade.

Support and Resistance

The yellow caution zone will frequently act as support or resistance if the price movement lacks momentum.

Fig 13. caution zone as resistance

Conclusion

The AI Wizard™ was designed to provide traders with a sophisticated, technically based, decision making tool that was also easy to use. With just a little practice your skill at using this tool should be well
established. But the real value will be the joy of having a precise and
consistent way to make the decision to enter and exit a trade.

The decisions will be based on proven technical indicators and help to remove the impact of emotion. Using this precision entry and exit strategy along with proper money
management should result in a positive impact on your trading account.