No, you defer to the trailing stop until you see the obvious signal. The idea of the grail is to catch the price before it moves below the reaction low/high, but deference is given to the trailing stop to let a trade "run" while you are patiently awaiting the obvious signal. The trailing stop is not a reversal point, it just serves as a place to get out if the trade reverses quickly. Pay close attention to the sharpness of the RSI peak and as I have mentioned the signal is strongest when in a divergence first, then a lower peak near the OB line, then a lower peak, then an equal peak --in that order. Grails with an equal peak but not near or at the OB Line are considered the weakest and need the closest money management. --And the inverse is true for troughs. Very simple system.
Simple system, yes, but very subjective. If you have the time, it would be very interesting to see some real time position trades with some larger charts showing Entry, Trailing Stops, Targets (if any) and Exit; along with follow-up charts.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=72864 This guy deserves a standing ovation. One of the very few that posts legit setups before hand and posts the results. Good luck getting this thread to come close. I decided it isn't credible and is not worth following any longer.
Here is a chart from a live call made today in Canadian Dollar futures where 50 pips were obtained. 54 pips were gained yesterday as well. I posted this in the FX Futures Journal. In the interest of full disclosure, I do have a Euro fx trade going that is in the red right now 21 pips, but the last two Euro trades netted 75 pips. All were called in real time along with an intraday Aussie short for 30 pips. I have other short positionals still open.
Update on the Euro FX trade that was in the red 21 pips yesterday. I closed it real time in the FX Futures Journal overnight for a 9 pip gain. My positional short positions in Euro fx and Pound are doing very well today. Also, called in real time in the FX Futures Journal.
The attached is the hourly chart used to get out of my Euro FX long trade and take the 9 pips. My short positional trades are working well for me today.