High Probability Trading Strategy: Hunt Volatility Funnel (HVF)

A trading strategy video where The Market Sniper Francis Hunt explains his signature high probability breakout trading strategy: the Hunt Volatility Funnel.  Francis Hunt is a technical analyst and trader who specializes in high-probability breakout trades. He looks for breakouts specifically, which he posts and teaches on his site The Market Sniper. One of his favorite setups is the “Hunt Volatility Funnel” (HVF). What is the Hunt Volatility Funnel? It’s a continuation pattern, i.e. congestion after an established uptrend. It has 3 successive lower highs interspersed with 3 successive higher lows meaning:

  • high
  • low
  • high
  • low
  • high
  • low

In other words, there is a tightening of the volatility as the original move’s volatility dies out. This sets up the re-emergence of a new spurt of volatility after tightening up have found a new comfort level which we call an “Axis” of the pattern where it settles down and the range gets very small. The expectation is the breakout will continue when it reemerges in the direction of the original trend. So, if we had an uptrend and we had 3 successive highs getting lower and 3 successive lows getting higher, tightening of range interspersed in high-low format. We select a target from the Relative High (RH1), the highest point when entering into the consolidation, to the subsequent Relative Low (RL1), the reaction low after the RH1. This will give us a distance, or amplitude, that is added to the Axes to give us the Target price where we expect the move has extended itself and may go into some form of consolidation or pullbacks.

In this video overview of the Hunt Volatility Funnel, Francis Hunt includes a detailed example of the structure of the Hunt Volatility Funnel with a weekly chart of Gold. Francis shows the “before” when the high-low pattern was developing and the “after” when Gold broke out of the consolidation pattern continuing higher as the Hunt Volatility Funnel projected. What’s interesting about this example is there are several HVF patterns within larger patterns, so traders could have traded some, any, or all of the various setups on various time frames.

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