Ross’s hook is certainly the market entry pattern that made Joe famous.
There is no professional or even amateur trader who does not know him, although his application today is subject to new rules and practices that the academies of the great trader keep and teach.
The story of this figure was told by Joe directly to Guido Albi Marini, his direct pupil and witness of the generational change that Joe entrusted to him a decade ago.
Many years ago, Joe lived in South Africa where he had moved with his family.
He was already making a living by trading, but he hadn’t taken into consideration the fact that on the farm where he was going to live, communications would be complicated.
Not being able to give too complex trading orders to his broker, he set to work to identify the simplest strategy of all time and… so trading on the Ross Hook was born!
Joe relates that he would climb a telephone pole once a week where he had made a “lead” and briefly gave orders to his broker on what became one of the most famous patterns ever.
On the internet you can read a lot of stories, of wrong or arbitrary interpretations of this phenomenal trading technique which, despite decades have passed, is always very efficient as long as “contemporary” factors that are not explained in the books are taken into account.
We at Joe Ross Fair Trading analyze the markets daily and year after year we take care to update the techniques of the great trader taking into account the markets that change but which, in any case, will always have the same rules that determine their movement: fear and greed. !
The Red Hook definition is “The failure of prices to achieve new highs or lows”.
Market Movers know that just beyond the Ross Hook there is an important grouping of orders from smaller operators. Movers will move prices up to the point where they see the orders grouped and beyond, in order to liquidate most of their positions.
This action by the “sharks” is called “stop hunt”!
If the pressure from external operators (traders and small institutional operators) is not enough to bring prices to a new level, the breakout will turn out to be false.
Through an accessory technique to the RH called “Traders Trick Entry” (or trader’s trick), the trader learns to follow the “sharks” towards their hunt by finding the best possible entry point, but exiting before they suddenly change direction and therefore contenting themselves with a small but significant part of their “meal”!