OVERVIEW
Our Methodology relies on our Proprietary Approach to quantify all our trades. Once quantified, Money Management leverages the position to risk no more than 2% of Net Asset Value ("NAV"). Once the 2% threshold is determined, Risk Management is employed to protect the Time Value of Money in order to protect profits and reduce losses. Discipline is required to maintain consistent performance, therefore Unicorn Macro Fund operates 100% rule based to prevent any subjective opinions from clouding portfolio management and adding unnecessary volatility. To operate 100% rule based with confidence demands the experience of testing in "Real-time Proof-of-Concept".
 
PROPRIETARY APPROACH
Our Proprietary Approach relies on the mathematics of shock waves (hydrodynamics) and the tangential contact of multiple waves. The waves are defined mathematically in three dimensional space and are sliced to represent waves on a two dimensional chart. This two dimensional representation reduces the waves to a binary outcome while the 3rd dimension is captured with a coefficient. Simply put, the markets are constantly battling the bull and bear waves and our Proprietary Approach is able to quantify and determine these waves.
 
MONEY MANAGEMENT
Our Money Management determines the amount of leveraged used to risk 2% of our Net Asset Value per position. By maintaining this discipline our Money Management causes us to risk more when we are profitable and less when we are not.
 
RISK MANAGEMENT
Our Risk Management intends to risk no more than 2% of Net Asset Value ("NAV") of the Fund for each position. Over time, our Risk Management protects the Time Value of Money, Price divided by Time. We do NOT employ traditional risk management which relies on "efficient markets" and the "normal distribution of risk."



Traditional Risk Management relies on efficient markets and the normal distribution of risk. The theory of efficient markets are that the market participants are solely interested in maximizing their wealth and will respond in a rational manner to price movements and new information. The theory of normally distributed risk is that price movements are random much like a coin toss or roll of dice. Mild price movements happen frequently and extreme price movements happen infrequently. When these price movements are put on a graph, it takes the shape of a bell curve which is used determine Value-at-Risk ("VaR") by the industry.

The problem with the Nobel Prize winning theories based upon the bell curve is that empirical evidence show they do not correspond to real world markets nor human behavior and underestimate the Value-at-Risk of a "fat tail" event. Based on an enormous body of statistical and social science research, it is clear that markets are not efficient, that price movements are not random and risk is not normally distributed.

 
DISCIPLINE
Unicorn Macro Fund is 100% rule base.

To maintain the consistency in performance, we strictly follow the our Methodology to implement our Proprietary Approach, Money Management and Risk Management. It does not rely on the portfolio manager's "feeling or instinct". Therefore, we are able to prevent subjective opinions from clouding portfolio management and adding unnecessary volatility.

 
EXPERIENCE
Unicorn Macro Fund has spent over 3 years in "Real-time Proof-of-Concept" testing its Methodology in real time and establishing a real-time modeled performance. This allows the Fund to experience trading under various macro market conditions using the Fund's proprietary approach supported by Risk Management and Money Management. The experience exemplified the value of Risk Management and Money Management and reinforced the need to maintain the Fund's discipline when the Methodology demanded the Fund to enter or exit a trade.