If you are keen to know about the ross hoook pattern and how to trade it then this ross hook pattern forex trading strategy will put you in the right direction.
I must warn you though: if you are a new forex trader, trying to find a ross hook pattern on your chart may be quite difficult at first.
Why?
Because first you have to identify the 123 pattern and then once that happens, next thing you need to look for look for is a ross hook pattern.
And a ross hook pattern only forms after the 123 pattern.
That is what makes it confusing for many.
So if you are going to find it difficult, then try using this ross hook pattern indicator mt4.
What I am going to present here is the most basic form of ross hook pattern trading because If I were to write in detail about how to trade the ross hook pattern, it would be too much information and I don’t want to confuse the heck out of you.
So What Is A Ross Hook Pattern?
In order for you to understand the ross hook pattern, you need to know what a 123 chart pattern is and in the 123 chart pattern forex trading strategy, I’ve explained that to an extent what that is.
This chart bellow shows what a ross hook patterns in a downtrend and uptrend:
- note that first comes the 123 pattern
- and second comes the ross hook pattern.
- note that the violation candlestick is the candlestick that breaks past point 2 of the 123 pattern.
Ross Hook Pattern Simplified
Most explanations tend to make rossk hook pattern confusing but my explanation will take the confusion out once and for all.
Look at the ross hook pattern and can you see a similarity between it and the 123 pattern? I you cannot, then have a look at the chart below:
- first part is the 123 pattern
- then the second part is the ross hook pattern that I’ve marked as “a-b-c.”
Here’s the thing:
the “a-b-c” is another 123 pattern if you were to mark “a” with 1, “b” with 2 and “c” with 3.
So in simple terms, a ross hook is another 123 pattern that forms right after the first 123 pattern…That’s basically what a ross hook pattern is: two 123 patterns forming right after the other.
How To Trade The Ross Hook Pattern
There are a few ways to trade the ross hook pattern but I’d like to show you the the most simplest one: trading the breakout of of ross hook:
- place a pending sell stop order at least 2 pips below the low of the ross hook which is marked as “b” on the chart below in a downtrend situation or for a uptrend market, place a pending buy stop order 2 pips above the high.
- there are two stop loss placement options: place above the high of the breakout candlestick or just above point “c” for a downtrend. Do the exact opposite for a pending buy stop order.
- for take profit targets, use a previous swing low as profit target for a sell order and a previous swing high for a buy orders. If these swing lows/highs can be found or they are too far away, then use the risk:reward ratio of 1:3 to calculate your profit target.
Disadvantages of The Ross Hook Pattern Forex Strategy
- notice that price has moved already after it made the 123 pattern and you’d be jumping in a bit late if the start of a new trend was confirmed after the 123 pattern.
- can be a difficult pattern for beginner forex traders to identify and trade.
- if the distance “stretches” between the formation of 123 pattern and the ross hook pattern, avoid trading it.
- nothing is ever perfect in forex trading, there will be false breakouts of ross hook and your stop loss can get hit.
Advantages Of The Ross Hook Pattern Forex Trading Strategy
- Trading raw price action without the clutter of indicators.
- a simple breakout trading with the same king of trading rules as the 123 pattern forex trading strategy
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