Book Review: Trading The Ross Hook by Joe Ross

Trading The Ross Hook by Joe Ross

Joe Ross has written several excellent books on trading commodities and futures including Trading By The Book, but Trading the Ross Hook may be his most popular book. The book describes a chart formation and trading strategy that Joe Ross has been studying and trading successfully for many, many years. On the surface, this is a fairly simple trading strategy, but it does take some time to learn to fully identify and how to fine-tune your trading with the Ross Hook method.

The Ross Hook is technical formation that occurs in trending markets where there is a failure of the market to make a new high in an uptrend or a new low in a downtrend. The Ross Hook must occur after a 1-2-3 trend reversal formation has taken place.

The Ross Hooks look like points or small peaks on a chart. Typically in trending markets, there will be a strong move in the direction of the trend and then a round of profit taking. This forms Ross Hooks on a chart. The Ross Hook is the bar on the chart at the point where prices peaked. The trading method states that you will buy a breakout of the high point in up-trending markets and sell a breakout of the lowest point in down-trending markets.

That may be an oversimplification of the trading strategy as there are many filters that Joe Ross describes that you can use to make this trading strategy more successful. There are also some excellent ways to enter the trade ahead of the crowd. Ross Hooks work in any timeframe and in any market. If you think about it, a trending market cannot move higher without triggering the Ross Hooks.

Trading the Ross Hook contains about 350 pages that not only discuss the Ross Hook, but Joe Ross also discusses trading in general that will help make you a more successful trader. Joe Ross has many decades of invaluable trading experience that is revealed in this book.

No trading strategy would be complete without the inclusion of a risk management plan. Stop placement is thoroughly discussed in the book and several alternatives are given. Joe Ross believes that it is up to each trader to determine which type of stop-loss strategy to use, based on their own risk tolerances.

An attractive feature to Ross Hooks is that you are trading with the trend. This strategy may be prone to false breakouts, but the market still tends to have a decent pop on false breakouts. Therefore, Ross recommends trading multiple contracts and taking profits at different levels. This way, you can hopefully cover your costs at the first level, lock in a profit on your second level and set yourself up for capturing a big run on the third level. Ross mentions that about 2 out of every 10 of the Ross Hook trades results in a big move.

Trading the Ross Hook offers commodity and futures traders an excellent trading strategy and there is no doubt you will get a better understanding of how the markets really work after you read this book. The book is meant to be studied, not casually read and to be put into action without fully comprehending the strategy. The book also gives you some excellent techniques for entering the Ross Hooks early, which I use in my own trading. Joe Ross has written some excellent books on trading commodities and Trading the Ross Hook will likely stand the test of time.