To start this review, I'll state that Trading By The Book by Joe Ross is one of the best books I have ever read that on trading commodities.
Joe Ross does an outstanding job of conveying his trading methods that have stood the test of time. Futures trading has been in Joe’s family for more than one hundred years. Much of the knowledge acquired in this time has been included in this book, which includes several different trading methods and a year’s worth of charts and explanations of actual trades he placed during a year.
Trading Trends and Ranges
Commodity markets will often fall into trading ranges. At this point, you have to switch gears if you want to trade a market when it falls into a range. Joe Ross makes it apparent that he normally doesn’t like to fight a market when it is rangebound, but he includes some good methods for identifying ranges and how to trade within them.
One of the best methods in this manual includes trading markets when they break out of ranges. The author explains how many days constitutes a range and at what point you would want to buy and sell. Joe Ross brought up a good point about how he reverses positions when a breakout of a trading range fails. I have also found that breakout failures are some of the best trades and they often leads to powerful moves in the opposite directions.
MultipleTime Period Trading
You will use the daily momentum indicator to buy on corrections, once the market begins to move back in the direction of the weekly trend. This strategy has you buying on dips in uptrends and selling on corrections in downtrends. This method also keeps you from buying commodities when they are already in overbought territory.
One-Two-Three Breakouts
Joe Ross is also know for his Ross Hook trading method. The Ross Hook is similar to the one-two-three breakouts, but they are often short in duration. The author does claim that at one time that is the only trading method he used and he achieved some of his best returns. Eventually, it became too mundane for him and he had to incorporate other strategies.
A Complete Trading Manual
I highly recommend this trading manual to commodity traders of all experience levels and I don’t say that very often about many trading books. I already use a version of some of Joe’s techniques in my trading and they work very well. I have also researched some of his other methods and I am incorporating them into my trading.
