You are learning CT (counter trend) trading from the DWMPF lines/values;

providing extremely accurate trade entries levels.

You are learning this with the maximum lot size possible; providing both the
biggest risk and biggest reward,
You are learning hedge protection for those rare instances that your entries were
not as sharp as they could have been; 10 pips being a very tight leeway for any
trading system.
1. Hedging
Hedging is at the pinnacle of Forex trading, both in terms of skill needed, and
also for its degree of difficulty to master.
The best hedge is of course the hedge that was avoided in the first place. But if
you avoid them all the time, then you master nothing.
The idea of using the Buddha or Pattern Recog indies as a confirmation after
there has been a breach of the DWMPF level was entirely to cause you a lot of
hedges to practise trading your way out of.
NOT getting hedged;
Very often achieved when NOT using confirmation of the Buddha or Pattern
Recog indies. It is all about making your entries OUTSIDE of the DWMPF line
breach; such that the DWMPF breached line will be between your entry price and
the DO.
This will reduce your hedges down to them only happening when PA punches
straight through this level on its way out to a more distant (from DO) DWMPF
line.
Typically, I find lines are most often breached by between 5 and 7 pips. As such,
a breach would have to exceed 15 pips for it to get hedged. I also find that
retracements are almost always for more than 15 pips below the DWMPF breach
line. This means that almost every trade gets me 20+pips profit; which at 3Lots/
$1,000 is worth 60% equity per trade.
Even if only making 1 trade per week, and with only $10,000 in the account, I
would be making $300,000 per year net assuming I did no compounding and
took out my profit every week 50 weeks a year.
NOT getting hedged simply needs your emotional skills development to sense
those times that each instance of the DWMPF breach is going to be a normal
retracement level.
Hedging Tools
I do not use them, or very rarely use them. I have Phils Rig and Phils Rig 2
templates ready to use if I want them. I never use the Phils Rig 2, because I find

the Fractal Hedge Trade Manager a pain in the arse. I occasionally use MPTM with
the Phils Rig template if I am in a hurry or distracted etc.

I almost always manually set my pending stop hedge order manually. I have a
routine habit of setting this trade BEFORE I set my desired trade. That is, I look at
the DWMPF level I believe PA will breach. I set the pending stop order about 15
pips outside of that level. Sometimes I will set a limit order 5 pips outside of the
DWMPF level I am targeting to trade. Alternatively, I manually trade it to allow
myself an up-to-the second option of not trading it.
Ive said many times before that I love the Fib1 level during the Asian or very
early London session. I more especially love this level on Mondays and Tuesdays
because these days are the least volatile most weeks.
Manually setting pending orders from Fib1 levels back to the DO during these
times of the day by itself would be enough for anyone to live extremely well,
even with only a $10,000 account, assuming no compounding.
Even so, occasionally you will get hedged.
This is most likely to be true when you are not emotionally in tune with the
market. Getting hedged is often a good time to take a break for a couple of hours
away from the screen, to come back to the issue with a fresh and clear mind.
Long walks are a huge help in this regard.
Why we use hedges rather than stop losses
Loss of lot size power is a subtle but fundamental reason why we use hedges
and not SLs. It is of the essence to all of our trading actually.
Because we deeply attuned to our trading entries, using all of our brain to intuit
our best entries rather than robotic or mechanical approaches which have no
emotional input into our decision making, we make the highest commitment to
our trading power. That is, we go all-in with the maximum possible lot size.
If we used a LS, then our account would be down about 30%, and our very next
trade would be with a 30% smaller lot size.
Lets look at the maths of it all. Assume we have a $333 account, which we trade
at 1 Lot.
If we stopped a loss at -10 pips, we only have $233 remaining; a loss of 40%. IF
we trade to recover our position, we are only able to trade at 0.7 Lots. Just to get
our money back, we must gain more than 14 pips.
Ever diminishing returns is why we hedge rather than use Stop Losses.
Our trading entries are statistically very much mostly correct. Closing one leg of
our hedge at that point where we see our next trading entry means we are

statistically much more likely to get back our 10 pips than to incur another 10
pips hedge.
Not only is this true, but we are also effectively making our second trade at the
full lot size of 1 Lot (per $333).
How we get out of hedges is exactly the same trading entry system,
but in reverse.
Remember, we are not using the Buddha or Pattern Recog confirmation indies.
We are seasoned, emotionally-equipped traders, looking for a trade set-up where
PA is OUTSIDE of the DWMPF we are going to trade.
BE+change.
Knowing that such a trade set-up 5-7 pips outside of the
DWMPF level where we release one leg of the hedge will almost always retrace
no less than 15-20 pips, finding a BE+change is highly likely.
The hedge I got out of yesterday returned to me a net 58% profit. So that can be
quite a bit of change.
All exit trades in profit.
For example, taking a 20-30 pip retrace on one
leg of a hedge and then re-hedging is an option. I will do this quite often to play
with a hedge to my own advantage. That is, because most 30 pip retracements
will then bounce back again, by re-hedging it and riding this bounce back up to
rip off an extra profit from one leg of the hedge can be a lot of fun.
Think of it this way. 80% of days are range trading, where we PA starts at around
the middle, then ranges up to the top of the chart to then later in the session
cross the DO to the other side of the range at the bottom of the chart.
With such days, we may see price retrace at the FibR1, and then later at the
FibR2 and even FibR3.
Because I almost always walk away from trading for at least a few hours when
hedged, quite often it is not until the next day that I resolve it. This being the
case, quite often PA is a long way away from where I got hedged, and whilst the
gap is only 10 pips, one trade is seriously in the money and the other is seriously
out of it.
And so At the first trade set-up to exit the hedge, I will aim for 20-30 pips then
re-hedge. Im now 10-20 pips in profit, but I havent finished playing with it all. At
the next trade set-up to exit the hedge, I again scalp for another 20-30 pips.
Sooner or later, when I can see that PA is at the top of the likely range for the
day, I then let one of these trade set-ups to exit the hedge to full course to the
other side of the chart, in favour of the remaining open trade.
By this method, you really can get excited by hedging, when you commit to
meeting the challenge head on with a view to make 200-300% equity profit from
it with just 2-3 re-hedges along the way.

The trick is to time correctly when you are finally at the top of the trading range
for the day, and that you will most likely see PA ride all the way to the opposite
side of the chart.
Trading while hedged. Trading while hedged is the same Lot size impact as if
you had used a SL. I do it sometimes just for the fun of it, when I see almost
certain guaranteed profits occurring.
If the ultimate goal of hedges is the protection of equity in your account, then
picking up 15 pips by trading while hedged is just as acceptable as picking up 10
pips of full lot size; the end result being the same. Having said that, if the trade
while hedged was so certain to lead to profits, it does raise the question of why
not release one side of the hedge.
My answer of why is perhaps both legs of the hedge are in nominal loss
positions, and that I am planning on multiple re-hedges to gain a 200-300% profit
outcome over the day or so that I trade it. Then I am known to trade the smaller
lot size while hedged.
Sorry, I didnt mean for this to get as long as it has. Yet we need to get into many
specific examples too. More to come later