Watch the Amazing Grace - 4 online guitar lesson by Richard Kiser from Gospel Fingerstyle Guitar
When you begin to play the the melody in the key of "D", you can see that the melody is right there in the chord pattern. I play the bass note which is an "F#" with my thumb. In the video I mention "sweeping" the strings in a chord. This is an exercise that you can practice on any chord. It will consist of four consecutive notes. The thumb strikes the 4th string, and the fingers pluck the 3rd, 2nd, and 1st consecutively. This requires a touch that will only be achieved through practice. Also notice that some of the notes are "hammer on" and "pull offs". Once again, try to practice these techniques with certain phrases on the song. It will add to the song when done tastefully. Another thing to notice is that on the last lone of this verse, I play a "Bm", pretty much the same way i used the "Am" in the first verse. When the melody goes up to the higher scale, I play the "A7" chord simply by barring the first three strings on the 5th fret while playing the melody. When you end this verse, once again remember that we are modulating a full step to the "E" chord. In order to do this, the transition note will be a "B7", and begin the lead in the key of "E".