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Hi guys, welcome to the
strategy section. So this is
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the DB four strategy. This
strategy is a trending strategy
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in which we trade the pullback
after it makes a double
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rejection on the email. Create
in a high probability
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opportunity. This is a simple
and easy to follow strategy.
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All the rules are predefined
beforehand so there's no
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guessing. After you learn this
strategy I want you to go out
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and back test every individual
market that you're thinking of
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trading at least 40 times per
pair. Obviously do more if this
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gives you more confidence going
forward. The testing period is
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very important as this was what
would be creating the pattern
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recognition skills and you'll
start to gain a sense of
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intuition also some pairs will
not work as well on this
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strategy as there are certain
markets that tend to meme
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revert in trading ranges and
some markets are more trending
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for example in my testing
Aussie pairs tend to be more
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meme reverting and pairs like
pound gold or even US dollar
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tend to trend this is what you
need to find out so I'm not
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going to tell you the pairs
that that work as I feel this
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is an important step in
creating confidence and
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discipline in yourself so the
strategy rules are simply the
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EMAs have to be aligned which
are the 1020 and 50 EMA so a
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good way of thinking is a comma
so correct order of moving
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averages we want next we want
to price to make the trend
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pattern which I'll be going
over in a second then we want
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to see a double bounce on the
one of the EMAs either 1020 or
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50 and we simply enter stop
order on the second rejection
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of the EMA and for stop loss
it's a 1. 5 ATR from the entry
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there yeah just from the entry
the exit is you just move it to
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break even after four candles
or you exit if you're in the
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negative target options this is
up to you this is your personal
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choice is in the test these are
what work best so one R and 2R
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1. 5 R fixed target or one R
and a trailing stop loss
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following the EMA that you
entered on So this is the trend
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trend wave pattern. So
basically in an uptrend you've
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got higher highs and higher
lows. And the opposite for a a
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downtrend. Um lower lows and
lower highs. Just see it as the
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market breathing in and out. So
I breathe out, breathe in,
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breathe out, resets and carries
on. So here's the pattern in
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action so you can see we start
with a lower low then a lower
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high and then and a rejection
there and then it makes another
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lower low and then the final
lower highs there also rejects
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in the EMA which is where we'd
enter with a stop order so
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practice drawing trends using
line tools on on your on your
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broker and get familiar with
this pattern and just keep
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drawing them over and over and
over so you're doing it in your
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sleep so good way of
remembering what it looks like
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is just basically like a
lightning bolt.
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So the lower so the trending
wave pattern it's not always
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obvious at first so like I said
at the beginning it's just
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practice drawing the the trend
on just to become familiar with
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it as you can see it's a lower
low here a lower high first
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rejection a lower low and then
another lower high and
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rejection and yes I do count
the widths as a lower low or
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lower high or high high when
I'm doing the wave pattern. So
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what candles do we enter on so
we we enter on doges and
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goofing or pin boys but to make
it even simpler we just want to
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see a small candle or a small
candle with wicks or a candle
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that's bigger than the previous
AKA and goofing and then we
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want to see rejecting the twice
and we enter on the second and
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simply enter a stop order above
or below so up on screen these
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are the candle sticks so we've
got doges again we just want to
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see small candles with wicks
and then we've got pin bars
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this is I always love seeing a
pin bar good sign of strength
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and and engulfing just engulfs
the previous candle so the so
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this is a bullish one if we're
looking for an uptrend that
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would engulf the previous we
enter a stop order above here
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for going short got a bearish
engulfing engulfs the previous
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one and we'd enter a stop order
below here
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So stop order entry. It
basically we want to go with a
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momentum. So we want the trade
to be going in our favour.
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Shooting up or down. We
depending if we're going long
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or short. So yeah we just
simply enter the a break above
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the candle. Like so. Either on
a goofy pin bar dodgy. So next
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up we have the ATR stop loss so
add the ATR to your indicators
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and set it to 20 days an SMA
when we're looking to enter and
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place our stop loss simply
hover over the candle and look
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at the ATR this is the average
daily volatility of pips we
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want to divide this by two and
then add add the original
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amount so using the example
below we'd hover over the
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candle and it it show us 228 so
you just divide this by two and
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that would be one one four and
then add the original ATR
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amount to 28 and your total
will be 342, which in pips
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would equal 334. 2 and that's
our stop loss so you add this
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from where you're going to
enter the stop order below or
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above the candle so a full
breakdown we've got the lower
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low lower high and the lower
low we've got the first
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rejection here and then we've
got the second rejection there
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the EMAs are aligned got the 10
the 20 and the 50 pulse based
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and yes the two rejections like
I said and then we simply enter
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a stop order below this but
because that one closed higher
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you can then raise your stop
order there to get an even
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better entry and then we get
filled and then break even
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after four candles so 1 234
this candle you'd move it to
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break even and it just keep you
keep you in for a bit of profit
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before reversing back and the
stop loss would be on this stop
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loss ATR would be hovering over
this candle and working out the
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and that's what it would be. So
it's all predefined, all ready,
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all good. So sometimes you
cannot enter the trade when the
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candle is too big like an
engulfing candle so there's a a
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technique you can use which is
the 50 -fib technique basically
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you measure the candle from the
high to the low using the fib
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and archie retracement tool and
enter the 50% level so here's
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what I'll do I'll go over to
the charts and show you an
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example so here we've got an
example of a trade so we have
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the first rejection here so we
have the lower low lower high
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lower low lower high then we've
had the first rejection and the
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second rejection now this
candle was far too big for the
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stop loss I like to have a bit
of room above it so what we can
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do is we get our Fibonacci and
just measure it so go from the
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bottom to the top
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and you can see the note. five
level is where you enter so
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hovering over the candle if you
look to the left down here it
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says 151 so I'll get the
calculator so 1 five one
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divided by two plus 151 equals
226 so I'll put it at the 50%
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mark and then put 226 or 22. 6
pips
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So plenty of room on the stop
loss. So first targets there
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are one to one so you can see
plenty of room on the stop loss
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above which is good and we're
getting a good entry there so
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as you can see this wick just
filled us in at the 50% level
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and then you count your your
bars so count that as original
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1234 move it to break even and
then yeah hits targets. So I
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want to quickly cover this one
rule in the strategy. This is
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the most important in my
opinion. This is because it's
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our risk management. It's a
leading indicator and time
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saver all in one. A price is
not doing what we want after
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four candles and this is signed
something's not right. There's
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either no momentum or we're
just too early or too late. You
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want to be out of bad trade
trades as soon as possible. So
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it leaves more capital for
other opportunities. This will
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also get you out of a lot of
bad trades and save time and
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most importantly money. This is
the only risk management you
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need to do in this strategy and
it's made easy by not having to
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guess or overthink the
situation which is key. So,
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make sure you stick to this
rule no matter what.
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