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What is new about, a HUNT VOLATILITY FUNNEL THEORY [HVF THEORY] surel this is !ust a tra"itional s##etri$al trian%le alon%stan"in% te$hni$al analsis set u&'

When loo(in% at what has been &resente" as e)a#&les, #an o* thee)a#&les lai" out will be e)a$tl that, Tra"itional Te$hni$al Analsis+##etri$al Trian%les

 The (e ele#ent here is the a&&roa$h to the set u& an" how it ishan"le", HUNT VOLATILITY FUNNEL THEORY loo(s at the set u&"i-erentl

Also whilst all HUNT VOLATILITY FUNNEL THEORY [HVF THEORY].s/uali* as tra"itionall "e0ne" trian%les 1#ostl s##etri$al ones2,all s##etri$al trian%les are not HUNT VOLATILITY FUNNEL.s [HVF.s]

+o to re&eat The Hunt Volatilit Funnel set u& is a subset o* trian%lesas "e0ne" b tra"itional te$hni$al analsis

+o let us $lari* the "i-eren$e between the two Firstl there is abroa" $hur$h on "e0nin% an" e)&loitin% 3+##etri$al Trian%les. inter#s o* tra"itional te$hni$al analsis, with so#e 4ariations,&arti$ularl on tar%etin%

 The (e *eatures that "e0ne tra"itional te$hni$al analsis re4ol4earoun" the *ollowin%5

6 Tren" line theor is (e an" all trian%les are essentiall boun"b two tren" lines 1Note5 As$en"in% Trian%les ha4e a 7atresistan$e le4el an" 8es$en"in% Trian%les ha4e a 7at su&&ortle4el, but #ost o* our e)a#&les are s##etri$al, or an%le"3tren". lines, a&art *ro# hori9ontal, to so#e "e%ree2

: As tren" line theor is (e, a #ini#u# o* : &oints are re/uire"to establish the tren" line, with ; or #ore bein% &re*erable

; The tren" lines ha4e &re"o#inan$e in establishin%, the

a#&litu"e *or tar%etin%, an" the &oint *ro# whi$h thisa#&litu"e is to be &ro!e$te" *ro#, na#el the brea( o* thetren" line +ee the $hart below as an e)a#&le

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+##etri$al Trian%le as analse" b tra"itional te$hni$al analsis

< The tren" line tou$h &oints ha4e no s&e$i0$ $riteria to /uali*the#, a&art *ro# bein% ali%ne" with the tren" line "rawn Thisis #entione" in res&e$t to its rele4an$e to the &ri$e beha4iorin the &attern itsel*

= this it is #eant, *or e)a#&le, two &oints on the lower basetren" line $an o$$ur $on$urrentl without a re/uire#ent *or are$i&ro$al #o4e to the to& tren" line [As seen abo4e with thetwo le*t lower &ri$e &oint $onta$ts]

In the e)a#&le abo4e, the tren" en4iron#ent &rior to the setu& is not e)&li$itl re*erre" to in ter#s o* e)&e$te" out$o#e,the tren" &rior to the &attern is u&war" an" the 0rst &ointta(en on the &attern is at &oint 3=. an" is on the lower tren"line

 There are in$onsisten$ies in te$hni$al a&&roa$h to tar%eta#&litu"e, it a&&ears a 4ariation o* a#&litu"e $al$ulations *ora s##etri$al trian%le e)ists

 The #ost $o##on is that re&resente" in the =la$( "otte" line*ro# the 0rst hi%h &oint "own to the tren" line [>hart below?

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+##etri$al Trian%le tar%et a#&litu"e 4ariations

Howe4er, alternati4es ha4e also been seen, su$h as Tar%etin%a#&litu"es run *ro# when the &ri$e a$tion 0rst $rosses inbetween the tren" lines An a#&litu"e is run *ro# this $rossin%o4er the lower tren" line to the u&&er tren" line whether thereis &ri$e a$tion en%a%e" at this u&&er &ri$e le4el or not 1@ur&lea#&litu"e arrow on the le*t2

 Another alternati4e is the 0rst ti#e the &ri$e beha4ior ha4in%$rosse" o4er between the tren" lines 0rst intera$ts with sathe botto# tren" line In this instan$e the a#&litu"e ise)ten"e" *ro# the 0rst tren" tou$h &oint 4erti$all a$ross tothe other tren" line, in this e)a#&le the to& tren"

All these "eri4e" a#&litu"es are later &ro!e$te" u& *ro# thebrea( o* the to& tren" line, at the &oint this o$$urs, in thise)a#&le the &oint in the &ur&le bo)

 The Hunt Volatilit Funnels uni/ueness

In #an was it is #ore how we ele$t to loo( at the set u&that is "i-erent rather than the &arti$ular &ri$e beha4ior o* the&attern itsel*

For this reason Hunt Volatilit Funnel Theor has ta(en thesa#e &ri$e a$tion an" set u& an" $ontraste" how the #abe4iewe" b Te$hni$al Analsis an" throu%h Hunt VolatilitFunnel Theor

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 Tra"itional te$hni$al analsis loo(s at the s##etri$al trian%leset u& abo4e an" as the na#e su%%ests the &ri$e a$tion is4iewe" throu%h the a&erture o* tren" analsis, na#el thatthere are two $o#&etin% tren"s see(in% to #ani*est an" the&re"o#inant one will see the other tren" bro(en with

#o#entu#

= 4iewin% this &arti$ular set u& throu%h the #in"set o* tren"lines, tren" lines an" their li#itations "i$tate the #anner inwhi$h the set u& is tra"e"

Na#el5

6 An an%le" line "i$tates when a brea( has o$$urre": Whilst +to& losses are rarel "is$usse" in this set u&, it

is assu#e" that the sto& is &la$e" !ust outsi"e the

o&&osite tren" line 4erti$all below 1abo4e2 the &oint o*brea( an" entr

 The &roble#s with this a&&roa$h are5

• An an%le" line is %i4en &re$e"en$e o4er a &ri$e le4el, a&ri$e le4el is that whi$h &eo&le an" #ar(et &arti$i&antsrea$t to +o b "e0nition a hori9ontal &ri$e le4el line issubor"inate" b a line re&resentin% 4arious &ri$e &ointsat "i-erent ti#e *ra#es

• As it is not (now when the brea( #a o$$ur the a$tual

&ri$e *or the brea( is not (nown, this rules out the use o* &en"in% or"ers at the brea( le4el, as these $annot be(now till a*ter the *a$t

• = "e0nition *ro# the &oint abo4e, the tra"er a$tuallhas to be &resent, obser4in% an" in a &osition to enter atra"e at #ar(et as an" when the brea( o$$urs

• As these brea(s are su""en an" hi%h #o#entu# at the&oint o* brea(, ie 3i#&ulsi4e., tra"e 0lls #abe &ooran" sli&&a%e #a o$$ur or e4en entr *ailure till thetra"e has #o4e" too *ar, an" the tra"er is le*t

won"erin% whether to $hase the tra"e Not an i"eal&osition to be

• Loss sto&s $ant be "eter#ine" till the brea( o$$urs, asthe sto& &la$e#ent is 4erti$all below the entr 1u&si"ebrea(2 !ust below the lower tren" line

•  The sa#e a&&lies *or tar%et $al$ulation as this is"e&en"ent on brea( le4el *or the &ro!e$tion to be &la$e"at the ri%ht &oint on the "es$en"in% tren" line

• i4en all these tra"e relate" si#ultaneous &ressures,tra"e si9in% an" Ris(5 Rewar" assess#ents ha4e little

ti#e to be "one a&&ro&riatel•

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Here is so#e o* the &oints where the a&&roa$h to 4iewin% thesa#e set u& throu%h the ees o* Hunt Volatilit Theor an" The Hunt Volatilit Funnel "i-ers *ro# the 4er broa""e0nition that e)ist *or a +##etri$al Trian%le

We will also hi%hli%ht the inherent bene0ts therein

6 @rior tren" is an e)&li$it $onsi"ere" ele#ent +et u&se#anatin% *ro# a $ho&& 7at #ar(et are re!e$te" an" $annotbe HUNT VOLATILITY FUNNEL THEORY [HVF THEORY].s 1orIn4erte" HUNT VOLATILITY FUNNEL THEORY [HVF THEORY].s,where "own tren"s e)ist &rior to the set u&s2, in short a $learre$ent tren" nee"s to be i"enti0able5

a Fro# this continuation is e)&e$te" in #ost instan$esb The set u& &attern $o##en$es onl, when the tren" has

its 3e)haustion &oint., [whether a low or hi%h &oint]$ In7e$tion &oints are onl ta(en *ro# a*ter this 0rst

e)haustion &oint 1H6BRL62" A*ter the e)haustion hi%h 1or low C H6BRL62, the *urthest

e)hausti4e sell o- &oint in this e)a#&le, on what woul"

nor#all be the o&&osin% 3tren" line. in the tra"itionalte$hni$al analsis assess#ent The HUNT VOLATILITYFUNNEL THEORY [HVF THEORY] Theor 4iew&oint is#ore *o$use" on 4iewin% the e)tent o* $ountertren"rela&se a*ter the tren" bein% o4ere)ten"e" This"istan$e between H6 D RL6, be$o#es the &ri#ar tar%eta#&litu"e 1A@62 an" is "i$tate" entirel b thee)tre#ities o* the &ri$e a$tion in its initial e)haustion,subse/uent &ullba$( to its 0nal natural su&&ort le4el

e The tra"itional a&&roa$h *or te$hni$al analsts, o* atren" line &ri$e le4el without $orroboration o*

a&&ro&riate &ri$e a$tion at this le4el, is $onsi"ere"

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irrele4ant in HUNT VOLATILITY FUNNEL THEORY [HVF THEORY] theor

* In HUNT VOLATILITY FUNNEL THEORY [HVF THEORY] Theor all (e in7e)ion &oints an" #easure#ents aresu&&orte" b &ri$e a$tion

% Ea$h in7e)ion &oint #ust o$$ur alternatel a*ter a swin%low an" subse/uent hi%h, we sele$t the ne)t hi%hesthi%h &ost the low 1RL62, with ea$h hi%h 1RH:2 bein%lower than its &re"e$essor 1H62 an" ea$h subse/uentlow bein% hi%her than its &re4ious low +ettin% u& the+/uee9e

h Hunt Volatilit Funnel Theor, &la$es *ar %reater 4aluean" e#&hasis on the, ob4ious Volatilit re"u$tion, in theset u& rather than $o#&etin% tren" lines a&&roa$h TheVolatilit a&&roa$h &ro4i"es *ar #ore bene0ts, that the Tra"itional A&&roa$h *ore%oes, su$h as5

i Or"ers $an be &la$e" at 0)e" le4els, where the4olatilit is now "ee#e" e)&ansionar, rather thanthe tra"e bein% &er&etuall #onitore" an" entrle4els a"!ustin% the lon%er the tra"e in$ubatesbe*ore brea(in%

ii @er#ittin% 3+et an" For%et. tra"in% with the *ulltra"e i"ea bein% e)&resse" in a"4an$e with a(nown &otential Ris( to Rewar" Ratio &rior tobrea(

iii En%a%in% the #ar(et at the rare #o#ent in &ri$e

a$tion where the &ossibilit o* *ar ti%hter sto&s,will not be $ounter&ro"u$ti4e

i4 The &otential to $a&ture an e)&losi4e #o4e, ta(in%our tra"e well awa *ro# entr le4els earl in itsli*e

4 ui$( $losure i* ina$$urate with a ti%ht sto&,lea"in% to low ti#e in tra"e *or losers an" lon%erti#e in tra"e *or winners

4i Far lar%er Ris( to Rewar" Ratios *or the abo4ereasons

4ii Far #ore e#otionall $o#*ortable tra"in% as a

result, #eanin% %reater tra"er $o#&lian$e to thestrate%

4iii An e)$ellent strate% *or O&tion tra"in% too, with4olatilit a""in% to o&tion 4alue as well as theun"erlin% #ar(et 8elta #o4e

i We see( ; alternatin% hi%hs an" lows 1see the #a%i$ o*the nu#ber ; se$tion in a later sub#ission2

 ! The Tra"itional Entr is ta(en at the RH; or RL; inbearBin4erte" HUNT VOLATILITY FUNNEL THEORY [HVF THEORY] set u&s, this si%nals &ri$e a$tion has be%un its

e)&ansionar &ri$e beha4ior &ost a &erio" o* low4olatilit &ri$e a$tion or 3Funnelin%.

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( In e)$ellent &reCbrea( $o#&lian$e, Earl entries #a beta(en, a$$or"in% to HUNT VOLATILITY FUNNEL THEORY[HVF THEORY] Theor.s #ore a"4an$e" &rin$i&les not$o4ere" here, that 4astl in$rease Rewar" to Ris(

l ulti&le Ti#e Fra#e Analsis utili9in% HUNT VOLATILITY

FUNNEL THEORY [HVF THEORY] Theor.s ;G6 a&&roa$h&ro4i"es *urther o&&ortunit beon" the s$o&e o* this"is$ussion [Further HUNT VOLATILITY FUNNEL THEORY[HVF THEORY] Tools e)ist to ensure "ire$tional a$$ura$o* the brea( e)ist, an" are beon" this "is$ussion, *or#ore "etails re*er to the wwwthear(et+ni&er$o# ore#ail Tra"erThear(et+ni&er$o#], +horter Ti#e*ra#eset u&s on lower ti#e*ra#es (nown as &ri#ers #a also3#ulti&l. &otential returns None o* these hu%e3ulti&lier. %i*ts are $a&ture" b tra"itional te$hni$alanalsis Ris( to Rewar"s o* 65<; ha4e been obtaine"an" re%ularl "ouble "i%it RI+ TO REWAR8 RATIO ha4ebeen ta(en usin% !ust so#e o* these a"4an$e" *eatureso* HUNT VOLATILITY FUNNEL THEORY [HVF THEORY] Theor, be$ause o* the *o$us on Volatilit +u&&ression,an" ulti Ti#e Fra#e analsis

@attern View C U+8+8 [H<]

 Tri%%er Ti#e Fra#e View C U+8+8 [;J]

We ta(e the sli%htl earlier entr o* the &ri#er &attern, with &art o*our unit o* loss allowable, the Loss +to& be$o#es the *ar 3Ti%hter@ri#er. RL; *or a ulti&lier return all the wa to the a$ro &atternslar%er Tar%et as the &ri#er.s brea( has tri%%ere" the lar%er &atternsRH; *or

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# Also hi%h &robabilit o* out$o#e tra"es, but withunattra$ti4e Ris( to Rewar" Ratios $an be sntheti$allenhan$e" into Hi%hl Rewar"in% tra"es utili9in% thea"4an$e" *eatures o* HUNT VOLATILITY FUNNEL THEORY[HVF THEORY] Theor +ee EURNO

EURNO 

In the to& le*t $orner o* the $hart we assess the RI+ TO REWAR8RATIO as 6; in its stru$ture "es&ite it "is&lain% 4er hi%h&robabilit o* out$o#e $hara$teristi$s, this Rewar" is not s&e$ial

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Howe4er, earlier entries that were sort at a (e roun" le4els o*&re4ious su&&ort at KMJJ, with an initial Loss to& below RL:[KJ;6] an" subse/uentl at RL; [K:M a&&ro)i#atel :;M &i&s*ro# initial earl entries at KMJJ] as &ri$e a$tion asserte" awa,allowe" *or o&ti#i9e" RI+ TO REWAR8 RATIO As the Tar%et

re#aine" !ust throu%h the JJJ le4els [so#e :MJJ &i&s awa *or a656J RI+ TO REWAR8 RATIO]

 The hi%h $on4i$tion o* out$o#e brou%ht about b the i#&ulsi4eu&si"e #o4es, with *allin% we"%e slow &ullba$(s, an" $lear nearter# &rior u&si"e tren", %a4e $on0"en$e *or the earl entrstrate%

An initial 656,; has been o&ti#i9e" lea"in% to a RI+ TO REWAR8

RATIO 656J, there is little basis *or a$hie4in% this utili9in% Tra"itional Te$hni$al Analsis Trian%le Theor = retainin% the 4alue o*hori9ontal @ri$e &oint le4els, HUNT VOLATILITY FUNNEL THEORY[HVF THEORY] Theor allows *or or"er &la$e#ent D &re tra"e rewar"e4aluation D o&ti#i9ation = *o$usin% on two 3tren". lines"es$en"in% D as$en"in% to an a&e), the tra"itional a&&roa$h sets a#o4in% tar%et *or whi$h a tra"e &lan $annot be stati$all 0)e" orassesse"

 The (e is the 4olatilit s/uee9e, not the $ontra"i$tin% 3tren". lines

 The tren" was establishe" &rior to the $ontinuation &attern, onbalan$e o* &robabilities, es&e$iall i* the setu& is bein% $orre$tlanalse" Further HUNT VOLATILITY FUNNEL THEORY [HVF THEORY] Tools e)ist to ensure "ire$tional a$$ura$ o* the brea( e)ist, an" arebeon" this "is$ussion, *or #ore "etails re*er to thewwwthear(et+ni&er$o# or e#ail Tra"erThear(et+ni&er$o#

 There is a lot #ore to HUNT VOLATILITY FUNNEL THEORY [HVF THEORY] Theor than $an be e)&resse" here, I ho&e that this short

sno&sis o* the how HUNT VOLATILITY FUNNEL THEORY [HVF THEORY] Theor $onsi"ers the abo4e set u& a%ainst Tra"itional

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 Te$hni$al Analsis %oes so#ewa to e)&lainin% the "i-eren$e ina&&roa$h

 Than( ou *or our Attention an" Ha&& Tra"in%

Fran$is Hunt

HUNT VOLATILITY FUNNEL THEORY [HVF THEORY] Theor Ori%inator

Foun"er o* The ar(et +ni&er

8ire$tor o* @hoeni) Total Tra"er Trans*or#ation

 Tra"e ana%er o* the Fire =ir" HUNT VOLATILITY FUNNEL THEORY

[HVF THEORY] Fun"