Strategy
The DHFX three confluences are executed as LL’s and HH’s are made in a trend. This is a
retest/Retracement Trade.
Draw S/R areas on the higher time frame. Basis for a break and retest on the LTF.
Zones should be obvious
Confluences are 50 EMA, fib, candles, SR, trendline.
Break and Retest (H4 AND H1 ONLY).
1. M, W, D SR lines drawn on line chart.
2. Market structure, CLEAR (no confusion) break and retest (comes with experience).
3. 50 EMA behind price within SL distance.
4. Fibonacci 38-61%.
5. Check there is 1 to 1.5/2.0 profit potential. No roadblocks along the way.
6. Check NEWS.
7. ONLY TAKE 4 CONFLUENCE TRADES (Trend+38/61 Fib+50EMA+Stucture Break)
8. Open trade 1% of account. SL outside previous fib level (61%->38% & 38%->0%)
9. SL TO Break Even when trade goes 50% of the distance to TP1
TP1 AT 100% FIB and close 80% of the trade.
Trail 20%, TP2 at next SR level and keep locking in profits in case it runs. Example SL behind the 50EMA.
PATIENCE TO FIND THE BEST SETUPS-> MORE WINS AND LESS LOSSES.
NEEDS THE 1 TO 2 AND 2 TO 3 TO BE A CLEAR BREAK OF STRUCTURE.
Rules of DHFX Strategy
Be selective, you only need 4-5 trades a month! 4X50 pips = 200 pips/month, which, when consistent just
scale up.
4 pairs – USD/JPY, GBP/JPY, USD/JPY and Gold.
Draw SR lines/zones on the W/D/H4, WAIT to see a clear break on volume away from the level. Go to a LTF
and look for rejection (tails, morning star, evening star, engulfing, pin bar or railway tracks/tweezers).
ENTRY
THREE STRICT CONFLUENCES
1) TREND BREAKOUT- CLEAR bearish or bullish candles in break of structure then anticipation
of CLEAR row of Bullish/Bearish candles retracing to structure level of 61.8 to or 38.2
(examples).
2) FIB- Trade can be taken @ two levels 61.8 and 38.2. There needs to enough structural
Resistance and Support at these levels to warrant execution for either 38.2 or 61.8
3) 50EMA- For 61.8 the best trade is when price touches the EMA on either 61.8 or 38.2 level.
Otherwise for 61.8 level the 50EMA should be below 92.5 Stop-loss level and below the
61.8 stop-loss level for a 38.2 execution
4) Candlestick pattern – Rejection Tails, Pin bar, Bullish engulfing, railroad tracks etc
5) KEY LEVEL - Clear support/resistance, obvious.
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6) Optimize entry on the LTF. Can also support with divergence.
7) Trend IN conjunction to point (1) it should be in a trend making either LL’s/LH’s or HH’s/HL’s
-Take ONLY one trade
RISK MANAGEMENT
1) 1% of account
2) Once trade is half way from to target then move SL to Break-Even.
Take Profit
1) TP is at ‘0’ level.
However, Fib extension levels can be used for larger TP which can potential give following RR.
0.618 Entry RR 0.382 Entry RR
*0 Level 2 1.5
*0.27 2.9 2.62
*0.5 3.6 3.45
*100% 5.28 5.39
EXAMPLES – Only take the best
H4 example
LTF refinement
STEPS and RULES
1) ZONE IDENTIFIED AND RESPECTED ON W1, D1 and H4 – CLEAR/OBVIOUS/MULTI PEAK.
2) CANDLE BREAKS THIS ZONE AND FORMS A NEW HIGH – LARGE BREAKOUT CANDLE.
3) PRICE COMES BACK DOWN TO RETEST AND REJECT ZONE.
4) PRICE THEN RETESTS
5) ENTRY AFTER (TLB/CANDLE PB BE MORNING EVENING/50EMA).
(SAME RULES APPLY FOR SELLS)
