It is advisable to use this card with an increased number of Draw triggers, an increased number of Grade 3 Units, and an increased number of Perfect Guards. This will allow you to maintain hand advantage while applying great pressure with its effect, while at the same time offering a way to get rid of these Grade 3s if you are not using this card as Vanguard.
Critical triggers also work well with this card, since they will make it necessary for your opponent to guard against it if they are at 4 damage, forcing them to expend a lot of cards. Running a total of 12 Draw and Critical triggers is probably the best idea for a deck using this card.
Make sure to use Grade 1 Units with 7000 Power or higher as boosts for this card. This will allow Waterfall's power, even without using its effect, to reach 20000 or even 21000, and with its effect hit up to 30000 or 31000, making it very costly to block except with a Perfect Guard.
The following strategy is very effective if you have higher card advantage than your opponent, and your opponent is low on damage: launch an attack with your first Rear Guard against the Vanguard. Your opponent will probably block it, preparing to allow Dragonic Waterfall to hit. Then use Waterfall to attack a Rear Guard, preferably a valuable target. Your opponent will probably not risk defending it, and they will lose it. You can then apply any trigger boosts to the last Unit, including any Critical effects, and use it to attack the Vanguard. This will widen the gap between your card advantage and will probably allow you to survive the next turn easier, since your opponent may not be left with as much to attack with.
If you want a powerhouse to almost guaranty a hit for the final turn you could use Vortex Dragon to wipe out 3 rear guards (also opponent will not have any intercepts) and then Lizard Soldier, Raopia or Demonic Dragon Mage, Mahoraga to boost for 10,000 or 20,000 and along with Dragonic Waterfall's skills adding an extra 13,000 will will equal 33,000 or 43,000 and any triggers could reach 53,000.
Use this card alongside Dragon Monk, Goku and a high number of grade 3s. Ride Goku first to gain advantage by retiring units, then come late game, ride Waterfall in order to turn the excess Grade 3s in your hand into +10000 Power, allowing you to deplete your opponent's hand of resources then push for game.
Often your opponent will not guard Dragonic Waterfall when you activate its second ability early-to-mid game, you can take advantage of this by boosting it with cards like Flame of Hope, Aermo and Heatnail Salamander. Your opponent will be forced to let you use their effects or deplete their hand guarding Waterfall.