I just want you all to know that I am putting further development of this Forex training site on hold for at least a few weeks. I am working on a project to help my local community financially so the Town vision can actually be attained.

Since Forex trading system management is very definitely not for everyone, I am taking responsibility for some of the economic development of my little town: Meredith, NY. Apparently, I am the only person in the town who can do so! It’s quite amazing, but my help is needed.

So, while you have this little break, please take the time to learn the basics of chart reading that I have put up here for Forex Traders to become more consistently profitable. You might even have time to create your trading system from the little bit that is here!

That would really be great. So, until I have a better idea of how long this town project will take me, I’ll just leave this trading material online for you to study and use how you want.

Have a truly phenomenal trading month! I believe that the 4th quarter of 2008 will be unbelievable in the potential (so I will be moving as quickly as I can while also doing as well as I can to help)! Trade well.

Domination Wave Theory is not Elliot Wave Theory. Waves are counted on the smoothed or double-smoothed oscillating indicator rather than on the market. From peak to valley on the indicator’s waves constitute one leg.

The Beginning of Domination Waves

These waves and their respective legs are of definite value in predicting near-term future direction of a market.

Wave is a move up and down in an undulating motion. Wave is derived from the Middle English word waven, which means, to fluctuate.

The MACD, like any other smoothed, or double-smoothed, oscillating indicator, travels in waves, like the market.

In order to have another part of a wave pattern, another leg, the oscillating indicator must actually change direction from up to down, or from down to up on the close of a bar. Even if the change in direction is minute, the change in direction counts.

How to Determine the Start of a New Leg on a Wave

There are 4 ways to determine the start of a new leg on an oscillating indicator wave on a chart:

1. Weakness Divergence. (You have seen divergences already on this site.)

4. If a leg 2 moves beyond the beginning of a “leg 1”, it is automatically now the beginning of a new leg 1.

Necessary Characteristics of Domination Wave Patterns

These necessary characteristics are on the smoothed indicator, not on the market.

When the beginning of a new leg 1 on a chart is on the top side (market to move lower in price), then the end of leg 1/start of leg 2 must be lower than start of leg 1. The end of leg 2 / start of leg 3 must be higher than the end of leg 2 / start of leg 3 and lower than the beginning of the leg 1 on that chart. The end of leg 3 must be lower than the end of leg 1.

If the beginning of a new leg 1 on a chart is on the bottom side (market to move higher in price), then the end of leg 1 / start of leg 2 must be higher than the start of the leg. The end of leg 2 must be lower than the start of leg 2 and higher than the beginning of leg 1. The end of leg 3 must be higher than the end of leg 1.

Leg 1 is a move in a direction. (Thrust) (Strength in that direction)

Leg 2 is a re-alignment period (retracement of the move of Leg 1). (Weakness in that direction.)

Leg 3 is another move in the direction of Leg 1. More certain Thrust. (Confident Strength in that direction)

“Wave Mapping“, which will be covered in much more detail as this series of Domination Wave lessons progresses, is ONLY applying the above over and over on different time frames.

The smoothed oscillating indicator will either move straight to a signal pattern (fractal), or give three or more legs. When there is a new end of one leg / start of the next leg on a chart, two charts smaller will give you four parts 99% of the time. The one exception to this is with large, quick, vicious thrusts that produce a series of what are called “slide charts”, which you will learn more about in line-ups and time-synchs in the Inner Sanctum.

There is still a LOT more coming on Domination Wave Theory. I just want to lay down the groundwork before really digging in and explaining each concept on Domination Wave Theory given above.

If you have any questions or comments, please leave them. I will answer as soon as I can.

Have a phenomenal trading day, and prepare for some mind-blowing revelations on Domination Waves.

Parts 3 and 4 of the “on chart” lessons for reading the ADX. They go pretty quick and there’s some icky clicking, but I made them before I figured out how to really reduce the clicking. Anyway, it’s the PRINCIPLES of the ADX that matter here, and how to combine various patterns of strength and weakness. The ADX is one indicator that is great at showing strength and weakness.

This first video for today also has a little bit on the DMI/DI lines, in addition to showing the ADX principles on real charts. I don’t pay the directional movement indicator/index lines much attention because they really don’t deserve it, but there is a little bit. You could spend years studying those two lines and trying to figure out one significance after another. I don’t, however recommend that course of study.

This second video on the ADX is more of the same, but goes into some other aspects of ADX reading that aren’t covered in other videos. Again, these are from real time charts…

That’s about the extent of the information on the ADX that I’ll be giving out here on the blog. There will be more on the inside, coming in August.

The principles of the ADX and the conditions are given in previous posts.

So if you have any comments or questions, please leave them below. And while you’re at it, sign up for the email stuff above (and to the right). You give me your name and email address, and I’ll give you free silver membership into the “Inner Sanctum” when it opens up in August.

And let me know what kind of stuff you want to see in the Inner Sactum. I’ll do what I can to make it happen. Have a truly phenomenal trading day!

Just want to wish all my friends in the forex groups on Facebook a wonderful weekend! I won’t be here because we’ve got a great weekend planned, and I won’t be putting up any videos or posts until either Sunday night or Monday (New York Time).

I’ll be celebrating the 4th in an even more remote location than our home!

Back to Forex talk then.
Stay great!

Below is a video that shows a couple more ADX principles and shows how to look at them on a chart, including the theory behind the ADX. I’ll review a bit after the video…

So you see the difference between the strength and the weakness in trends? While the market moves farther in a direction, the ADX either moves higher than it was, or it doesn’t.

When the ADX moves higher as the market moves farther up or down, (after strength shown in that direction) then that’s strength.

When the ADX does not move higher as the market moves farther (after the ADX has already show strength in that direction), then that’s a weak move at the time.

XOW - ADX Outta Whack

Also shown on the video is the XOW, or “ADX Outta Whack“. The market moves with the ADX showing strength in a direction, then the market corrects a bit, then retraces part of the correction. As the market is retracing part of the correction, the ADX moves higher than it was before the correction (after a weak move registered in the opposite direction).

What the ADX is saying is completely out of what is visible in the market action and says basically that even though the market did not move farther in the direction of strength, the new motion in that direction is stronger than when the market was farther in that direction. For Forex Traders this XOW setup is a fantastic trading opportunity that doesn’t show itself very frequently.

It’s shown in the video so you can see it. AND, coming next week will be more ADX training videos, but with real charts instead of me hanging out at home with my white board.

So if you have any questions, please ask. Any comments? Leave ‘em. I’ll get to your question or comment pretty quickly. And if you want a LOT more useful info, I’ll have a secret area of this site available only to you if you leave your name and email address. Inside will be even more killer, more structured info and non-youtube videos, audios, and training ability. (There will definitely be a free section of the “Inner Sanctum” of DominationTrading.com - but that won’t be up until into August, 2008.

Let me know what you want more of so I can give it to you. Please, dear Forex Traders, let me know what you want to know and I’ll be more than happy to provide it if I can. Trade with greatness.

Today we’ll cover what happened with what I was talking about last night and how to really use the divergence patterns in combination with the basic trading model I talked about earlier. Now, really, you can be 55% wrong with this stuff, and with the risk, money and profit management stuff you’ll learn in the coming membership site (yes, there will be free level), you will be able to make 6X the profits you’re likely making, assuming that you’re a profitable trader already.

From the point we ended last night in the video, well look at what happened, what caused the buying and selling patterns that followed, and show you that you would have made a profit, twice - even though the market didn’t move much. Take a few minutes to watch the video below…

I want your comments, questions, and even your suggestions and criticisms on how I can make these videos better for YOU. I already know this stuff, but what I don’t know is what you don’t know, or need explained differently or more clearly, or more specifically.

Remember that the purpose of this site is to train more highly profitable forex traders - and you can learn all this basic stuff as my gift to you. Of course, later on some day, I might develop some sort of a program to teach more advanced principles, but until you know the basics COLD, there’s just no way you can possibly qualify for such a thing. (I’m really picky about who I train and what has to be known before we even start.)

The primary characteristic in successful traders (in any market the public can trade and has sufficient volume) is strict discipline in managing the trading system being used. When the trading system says to trade, you trade. When the system says to add on, you add on. When the trading system says to exit part of the position, or all of the position, you exit. The system says what actions to take. And your job is to know how and when to take those actions.

Remember, also, that the elite traders of the world are also those who have their goals aligned in the proper order of importance: FIRST is to preserve your capital, protect your funds, and SECOND is to profit from trading. You can see how discipline really plays a major role in trading.

How do you get really good at managing a trading system? The same way you get really good at anything: Practice. What’s really cool about practicing managing your trading system today versus 1995 and earlier is the ability to “paper trade” a system.

Another time we will cover how to properly use paper trading to get up to speed on managing your system trading forex. And tomorrow we will cover the rules, specifically, of using the divergence combinations with the basic trading model I talk about in the videos.

Stay great, ask questions, make comments, and have a truly phenomenal trading day!