SPGM Arcs

Simplicity and profitability in forex trading
Introduction to The SPGM-Arcs
BY
EKONYE G. KINGSLEY
Copyright © 2011 SPGM-Trader Inc. All rights reserved.
The SPGM-Arcs Page 1

DEDICATION
This book is dedicated to the Almighty God, The Alpha and Omega…truly, you are a God that
‘Never sleeps’

ACKNOWLEDGEMENT
I wish to thank Mr. Steve Gardener (USA), friend and colleague, for his editorial assistance in
the preparation of this book. His insightful recommendations, novel ideas, motivational tips and
constructive questions proved invaluable in the course of writing this book.

DISCLAIMER
Trading in the Foreign Exchange market is a challenging opportunity where above average
returns are available for educated and experienced investors who are willing to take above
average risk. However, before deciding to participate in Foreign Exchange (FX) trading, you
should carefully consider your investment objectives, level of experience and risk appetite. Do
not invest money you cannot afford to lose. The content of this book is neither a solicitation nor
an offer to Buy/Sell Forex futures or options. No representation is being made that any account
will or is likely to achieve profits or losses similar to those discussed in this book. The past
performance of any trading system or methodology is not necessarily indicative of future
results.

“As a bull market continues, almost anything you buy goes up. It makes you feel that investing
in stocks is very easy and safe and that you're a financial genius.”
….RON CHERNOW

SPGM-Arcs
INTRODUCTION
SPGM-Arcs is yet another unit of the SPGM-system that is equally simple and powerful capped with high
degree of consistency. Setting up this powerful unit of the SPGM-system is not any different from the
other units. Same fundamental principles, same indicators but different unique approach from all other
units. The basic idea behind the SPGM-Arcs is that, I thought, just like sma5 is applied to higher time
frames for trend determination, if we apply same approach to sma20 what would we get? Sma5 is
tagged ‘buy mode’ when pointing upward, ‘sell mode’ when pointing downward and ‘no trade mode’
when flat.
ILLUSTRATION CHART -1


A quick glance will show that sma20 also posses all these characteristics the only difference between
sma5 and sma20 is in SPEED. We all know that sma20 is a slow walker but this slow walker carries so
much pips along with it and SPGM-Arcs helps you tap into the pips reserve with EASE. From my
microscopic view of price action on sma20 when it assumes either buy mode, sell mode or a no trade
mode, I made a huge discovery!
“When sma20 assumes a buy/sell mode for the first time either due to reversal or continuation, the
first time price will test sma20 outrightly will most likely result in a strong bounce provided
support/resistance have not been reached on a higher time frame and also provided sma5 on higher
time frame(s) points in the same direction as sma20 on the lower time frame”


From my discovery I was able to draw the following deductions;
1. When sma20 turns from buy mode to sell mode it takes the shape of an arc (Bearish arc) and
the first time price will hit sma20 after bearish arc shape is formed, always result to a strong
bounce to the downside to at least the last valid swing low formed before impacting on sma20
and depending on volatility and trend, further drop of price can be anticipated up to projected
price point (price projections)on the expected 1-2-3 candle pattern inscribed on the bearish arc.
Entry for short definitely will be at bounce point at sma20 and first safe exit point (Exit1) will be
at last swing low before impact on sma20 was made while second safe exit point (Exit2) will be
that same projected price point mentioned earlier.


This same principle can be applied also when sma20 assumes a sell mode from a no trade mode.

2. Similarly, when sma20 turns from sell mode to buy mode it takes the shape of an arc (Bullish
arc) and the first time price hits sma20 after bullish arc is formed, always result to strong bounce
in price to the upside to at least the last swing high reached before sma20 was tested and also
depending on trend and volatility, further rally of price can be anticipated up to projected price
point (price projections)on the expected 1-2-3 candle pattern inscribed on the bullish arc. Entry
for long will be at bounce point at sma20 and first safe exit point will be at most current swing
high (Exit1) while second safe exit point will be at that same projected price point mentioned
earlier.

Same approach can be applied when sma20 turns from a no trade mode to a buy mode

3. Furthermore, you will recall that SPGM-system is best traded using two time frame
combination; the lower time frame for finding entries while the higher time frame for keeping
close watch on the general trend. I recommended four different time frame combinations in my

other book ‘The SPGM-system’ for trading any of the units depending on the kind of trader that
you are; scalper, swing trader or position trader. For reminder sake, the time frame combos are;
a. 5mins/4hrs
b. 1hr/1day
c. 4hrs/1week
d. 1day/1month
And with the emergence of the Meta Trader 5 platform, mt5, we can now conveniently add these two
e. 15min/8hrs
f. 30mins/12hrs
The SPGM-Arcs makes more sense and also more profits when the SPGM time frame combination
approach is applied. The lower time frame will be strictly for finding entries based on sma20 bounce
while the higher time frame is basically for general trend determination as signified by sma5. In general,
price bounce on the SPGM-Arcs is strongest when the arcs forms in same direction sma5 points on the
higher time frame in other words, a bullish arc gets stronger bullish effect in an uptrend while a bearish
arc has stronger bearish effect on a downtrend. If these are carefully observed, there is a higher chance
of price reaching Exit2 meaning more profit!
Finally, putting my deductions together logically, a simple SPGM-Arc setup was drawn.
SETUP:
Depending on your favorite time frame duo, setup two chart windows for each time frame but
experienced traders can use just one chart window and just switch between time frames when
necessary. Emphasis will be laid on sma20 on the lower time frame and sma5 on the higher time frame.
BUY TRIGGER:
If a bullish arc forms on the lower time frame, that is sma20 turning from sell mode to buy mode or from
no trade mode to buy mode, switch to the higher time frame to check if the bullish arc forms in line with
an uptrend as signified by sma5 pointing upward.
ENTRY:
If the conditions are met, entry for long is made manually at the first test of sma20 on the lower time
frame and you do not have to wait for the candle that makes the impact on sma20 to close out rightly
before taking your long position.
STOPLOSS:
Stoploss is placed just below the base of the bullish arc and if it is an arc formed as sma20 turns from no
trade mode to buy mode, stoploss will then be placed just below sma20 during the no trade mode.

EXIT:
For safety purpose, I devised an exit technique; before making your entry, split your usual lot size or
order size into two. For instance, if your usual lot size is 1.00, split to 0.50 apiece and then take two
separate long positions from same entry spot (sma20) and set the exit target of one to Exit1 and the
other to Exit2. If/when Exit1 is achieved move stoploss of second order with exit set at Exit2 to
breakeven and that way you will be fully safe guarded.

SELL TRIGGER:
If a bearish arc forms on the lower time frame, that is, sma20 turns from buy mode to sell mode or from
no trade mode to sell mode, make sure sma5 on the higher time frame is also on sell mode for trend
consistency.
ENTRY:
If the above condition is met, entry for short/sell is made manually at first test of sma20 on the lower
time frame and you also don’t have to wait for the candle that makes the impact on sma20 to close out
rightly before taking your shorts.
STOPLOSS:
Stoploss is placed just above the peak of the bearish arc and if it’s an arc formed as sma20 turns from no
trade mode to sell mode, place stoploss just above sma20 during no trade mode.
EXIT:
Exit targets on sell triggers are set applying just the same approach discussed in buy triggers above.
Instead of a single short position, split your lot size into two and take two simultaneous short positions
at bounce point and set exit target of one to Exit1 and the other to Exit2. If/when Exit1 is hit, move
stoploss of second order with Exit2 to breakeven. That way, the day is already a profitable day.


EFFECTS OF SUPPORT AND RESISTANCE ON SPGM-Arcs
Running a quick back test of the SPGM-Arcs on any trading instrument and on any time frame of your
choice will reveal that there are cases when price spiked past sma20 or worst still, cases of multiple
candle closes above sma20 when it was supposed to make a u-turn at sma20. There are also cases when
price makes a turn just few pips to impacting sma20 and in the end, sma20 don’t get tested. Price u-turn
of these sort are very common occurrence on a price chart and I tell you it’s all due to effects of support
and resistance at such price levels around the formed arcs.
Support and resistance can come in so many forms and looking at it from an SPGM perspective, it can be
from price reaching previous swing high/low, it can be from price reaching previously broken support
turn resistance or resistance turn support. It Can also be from a fibonacci retracement level, can be from
price reaching sma5 or sma20 on a higher time frame (can be lower) and it can be in form of a trendline
or price channels on the lower or higher time frame.
When price trades near support/resistance especially during retracements, there’s a good chance of
price likely to find its bounce point at such support resistance levels…these levels could be before
reaching sma20 or past sma20 on the lower time frame. Such price moves sometimes comes as sharp
price fluctuations and is manifested on the entry time frame as price turning point before reaching
sma20 or past sma20. I advice that traders should always apply some discretion in taking trade

decisions. Make sure you only take trades whose stoploss as defined by the SPGM-Arcs are above/below
key resistance/support for bearish/bullish arcs respectively. That way, you will cut down your risks to a
bearable minimum. More so, you must not dwell only on your choice time frame duo, always take time
to check other higher time frames (even lower) for consistency before taking trades. For instance, if you
are a 1hr/1day class of trader, you should also always check 4hrs, weekly and monthly and if you have
the time (it pays to have the time), see 15mins and 30mins also because you never know when a setup
on 4hr charts can provide room for wider or narrower retracement which could affect your 1hr
setups/entries.
When an SPGM-Arc entry is within price ‘spike-able’ distance away from nearest support or resistance,
(figure out average price spike-able distances on various time frames on your own), the lot size splitting
approach can be applied. Part of it at entry on impact on sma20 and the other part as pending order at
the support or resistance price level. There’s a good chance that a pending order don’t get triggered
sometimes depending on volatility of the market and therefore, the part entry at sma20 makes you not
to miss out completely on the move if you were to put your full lot size at pending order or puts you out
of greater panic if price shot past sma20 when you already placed full lot size at sma20. This just a little
equity protection strategy.
I’ll also love to add this, support and resistance can also prevent price from out rightly impacting on
sma20 before it takes a u-turn. To remedy situations like this, I advice you apply discretion and
experience so that you don’t miss out on the move and a good way of doing this is by constantly viewing
other time frames and that could help you figure out when an impact on sma20 on the entry time frame
may not be achieved.
I have a few illustrations to buttress my points on how support and resistance can affect your SPGM-
Arcs setups or entries.
EXAMPLE 1:
Below is a EUR/USD daily chart displaying a bearish arc setup but the expected bounce took place just
few pips to impact on sma20. Sma20 was not tested to confirm entry for short however, the other chart
showing EUR/USD weekly confirms why sma20 daily was not tested. The weekly candle that opened
simultaneously on that same day, opened right at sma5 (outside-open bear candle) giving it little or no
room for further rally hence, prevented sma20 daily from being hit. A trader who watches only the daily
time frame on that pair would definitely miss out on the move while waiting for an impact on sma20
that never came however, a smart trader who flips through all time frames would see that weekly open
would most likely apply the lot size splitting technique with one short position at sma5 weekly and a sell
limit at sma20. A cent added to your equity is worth $1,000 dollar that is yet to be made from the
market.


EXAMPLE 2:
The chart below displays AUD/USD weekly time frame and you can see the clear bullish arc setup but
sma20 was never truly tested before the bounce took place leaving you wondering why it reversed few
pips to sma20. This occurred because the other chart below reveals monthly chart of AUD/USD and how
the new candle opened right on sma5 (no-retrace bull candle) same time price got near sma20 on
weekly and giving no room for further drop and the reason behind failure of price to test sma20 of
AUD/USD weekly before it bounced.

Further confirmation of this failure above can be seen on AUD/USD 4hr chart when there was a two
consecutive candle close above sma20 which marks the end of the downward move and beginning of a
new SPGM-Waves to the upside. Again, a smart trader cannot miss that reversal near sma20 weekly.

EXAMPLE 3:
The GBP/USD daily chart below displayed a fine bearish SPGM-Arc setup and how price short past
sma20 (the bounce point), made multiple candle closes, tested that key support turn resistance before
eventually making the much expected bounce. A trader who took my advice will have two running short
positions; one from sma20 and the other from that resistance. That was a beautiful trade you will agree
with me.


EXAMPLE 4:
The chart below exposes how the bounce point (sma20) couldn’t hold price action. Price had to spike
through sma20 to test the nearby trendline before the effect of the SPGM-Arc setup was felt.
VALIDITY OF SPGM-Arcs ENTRIES
Price does not move in straight lines else, we would all be billionaires. Whether you like it or not, price
must swing and because of this, the fact that not all traders are smart enough to manage retracements
and for safety sake, each SPGM-Arc entry is recommended to last only for the period of its
corresponding higher time frame. In layman terms, 5mins entries will only be valid for 4hrs, 1hr entries
valid for 1day, 4hr entries valid for 1week and 1day entries valid for 1month.
CONCLUSION
Having been through the SPGM-Arcs together leaving no stone unturned …as simple, as powerful and as
consistent. It is a system for both newbie and experienced traders. The SPGM-system is one unique

great system with different smaller units and each providing alternative entry approach to the sma5 and
sma20 crossover. The present five SPGM units so far are SPGM-pivots, SPGM-brain, SPGM-breakouts,
SPGM-waves and of course SPGM-arcs. They can each be traded independently; all you need do is pick
the unit that is simpler and clearer to your own understanding and if you have all the time and right
account size, you can look out for setups on all five units and then pick the ones that are of high
probability.
It will interest you to know that it is an SPGM-wave setup that paves way for SPGM-arcs setups and it is
most SPGM-arcs setups that lead to SPGM-breakouts setups while most SPGM-brain setups are also
SPGM-arcs setups. The systems are all connected one way or the other and that is what makes the
SPGM-system very unique. I personally love trading setups at random from all five units of the SPGM-
system however, if am to pick an all time favorite, I think I will settle for SPGM-arcs anytime any day
because it gives me the edge and flexibility I need in trading the financial markets. A friend of mine once
complained that the smaller units of the SPGM-system are too many and might get a trader confused. I
told him i agree perfectly with him because i will see such traders as lazy traders who do not nurse
dreams of becoming professional traders. One secret i want you to know is that there is a greater
advantage in knowing how to spot setups of any of the five units when you see one and i assure you that
from time to time, you are bound to hit jackpot trades if you can be disciplined enough to let your
trades run. What I am trying to break down right here is that, knowing how to apply all five units of the
SPGM-system can give you multiple entries in the market which can amount to incredible returns. For
instance, see the GBP/USD 4hr chart below;
ILLUSTRATION CHART-27

You can see for yourself how more entry opportunities sprang up in succession as the downtrend
progresses. That down move you see on the chart was worth a total of not less than 3000pips and the
best part of it was that the move lasted only less than a month (Sept 14th - Oct 2nd 2009...surprised?
Please don't be, it did not happen out of coincidence, it only happened because The SPGM-system
stands unique.
I love giving examples to back up my claims. Here is another example below for a trader who trades
4hrs/weekly combination. The weekly chart below shows GBP/CHF hitting strong support turned
resistance at point marked with an arrow and vertical line.
Now we switch to 4hrs chart to see how that down move played out.

It will interest you to know that the seven weeks down move produced not less than 10,000pips all
together from multiple entry opportunities provided by over 10 setups from a combination of all five
units of the SPGM-system. Also not a coincidence!
The SPGM-arcs setups occurs in all time frames however, the higher the time frame, the higher the
magnitude of profitability of an entry. That is why I recommended setups on higher time frames of 1hr
and above and for those interested in lower time frame setups, care should be taken when selecting
setups to trade. If you must trade them, setups must be consistently in line with bigger move on higher
time frames. Smaller time frame SPGM-arcs setups that occur during early part of London session are
most likely to yield impressive results compared to those that occur on other market sessions.
Finally, this is the part where we draw the curtains on our discussion on the SPGM-arcs. I sincerely do
hope and pray that trading the SPGM-arcs will bring about a great new positive experience in your
trading career. Always remember that the SPGM-system cannot and will not make you all the fortunes
you desire from forex without a fair prior knowledge of support and resistance and most importantly,
discipline in handling your trades. You will need a lot of patience, don’t get greedy and above all,
FOLLOW THE RULES!!!
Good luck to you all in your trades.

SPGMforex Contacts:
Email: spgmforex@googlemail.com
Skype: spgm-trader
Twitter: spgmforex
Facebook: SPGM Forex

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Simplicity and profitability in forex trading

Introduction to The SPGM-Arcs

Copyright © 2011 SPGM-Trader Inc. All rights reserved.

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From my discovery I was able to draw the following deductions;

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EFFECTS OF SUPPORT AND RESISTANCE ON SPGM-Arcs

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VALIDITY OF SPGM-Arcs ENTRIES

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Good luck to you all in your trades.

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Facebook: SPGM Forex

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