Joe Ross hooks - review of unusual strategy
Today we will get acquainted with the original and unusual strategy developed more than half a century ago by the famous trader Joe Ross. As you sure have guessed, the article will be about Ross 'hooks.
Let 's say directly, this vehicle is already forgotten by many traders and not so often used by them. However trading on it, it is possible to get profit in the financial markets. How to do it in the 21st century - now we will tell.
In a professional forex trading environment, there are two approaches to predicting exchange rates: price flow analysis using technical indicators or Price Action (PA).
PA is a forecast of trends in quote movements, a method popular due to lack of lag and a more informative broad view of future movement. Patterns and graphical analysis make it possible to determine in advance the areas of the teak profile, the point of reversal or correction.
If the indicators work according to some hidden formulas for complex signal calculation, obtaining data from past historical periods, the figures of the glow analysis are formed "here and now," rarely using "deep immersion."
Price Action 's popularity has spawned many strategies that the Internet is littered with, but one of them is undeservedly forgotten. This is Joe Ross 's hook - an author 's strategy developed 60 years ago.
The most interesting thing is that its author still teaches the art of trading on the educational portal Tradingeducators, and no one remembers what he looked like in his youth. Joe Ross hit the exchange in 1957, a hook-trading strategy one of the first to bring him a real pro in a distant 1959.
It has been tested and improved for over 20 years, revealing its potential with the advent of the futures market in 1982. Joe Ross later dedicated a separate book to this strategy, "Trading The Ross Hook."
Pattern 1-2-3 is the foundation of Joe Ross 's strategy
Pattern 1-2-3 became the first Price action figure to be spotted by young student Joe Ross in 1957. Already then he began to trade on it, repeating exactly the strategy of trade described in the article on our website.
While continuing his studies, Ross took possession of many trading systems, however the aspiring trader continued to improve his own discovery. He quickly realized that the detected hook pattern only works under the following conditions:
Reversal of the old and beginning of the new steady trend;
Liquidity and increased instrument volatility.
By picking up a liquid asset, the trader can scale the hook strategy to any timeframe. For example, some of his students, according to Joe Ross (he calls them "hookers," hook is a hook), trade hooks on five minutes.
It was the search and confirmation of the trend that forced the trader to "go further" than the price movement within Figure 1-2-3. The hook, marked by the author with the letters Rh on the chart (Ross Hook), allowed to reliably confirm the pattern, and its sample - presence and strength of the trend.
Another advantage of the hook discovered by Joe Ross was its repeatability: the 1-2-3 pattern often created a steady and lasting new trend. Each top or recess became another hook that Ross used to enter, dialling a "pyramid of warrants."
To determine the end of directional motion, Joe Ross used the reverse hook RRh, relying on the opposite Rh minimum or maximum graph. A sample of the nearest RRh became a signal to close all positions and find a new formation 1-2-3 in the opposite direction.