1-2-3-Formations and Ross Hooks

[lbranjord]

A RRH is the #2 in a 1-2-3.

The Ross Hook is actually a 1-2 (if I can use this comparison), and the #1 is called a RH, but if prices never reach this RH (#1) but turns and moves below the #2 we have a 1-2-3.

So a breach of the #2 in the 1-2-3 is actually a breach of a Reverse Ross Hook.

Skog

This explanation just said it all. Thanks Skog

 

[WallStreetHero]

excellant thread,

 

[bigratt]

Great Thread and Hello Joe! I have been a fan and following your material for about a year now. I have strongly considered taken up your services on a mentorship. I have been trying to trade for 6 years and I'm yet to find a method that allows me to be profitable over the long term. I'm hoping that your material will allow to me to just that. One thing that i would like some clarification on. You recommend using 3 lots for the TTE. U close 1 lot for costs and breakeven of the ross hook, how do u know that the pattern is a bust before it takes out your stop below point 3 or failure bars of the ross hook? IS your protective stop supposed to be under the failure bars of the ross hook or point 3? Lots 2 and 3 run for profit. Do u have to hope that your 1st lot has enough pips in it to cover that loss to below the failure bars if it happens? I have never used a trailing stop before in my trading, how many pips do u typically set a trailer at with this method and how many pips into a trade do u typically like to set your stop at breakeven without compromising the trade? Is there any other ways to exit these trades that I'm not aware of? Thank You for your brilliant trading ideas and I look forward to learning from your experience.

 

[JahDave]

Re: Trading the 123 on the 1 minutes-nightmare!!

Hi all,

I'd just like to introduce a bit of feedback from trading the 123 on 1 minute time frames on the FTSE. I've traded it in the month of January and came out in the green using a combination of the 123 and what I called "mini flags". In the end I had to abandon it out of frustration really.
This pattern, although it occurs frequently fails so often that it becomes very frustrating. When you have a 123 failure, Ross recommends reversing the trade but that too can be pretty tricky. I think you've got to be very cool-minded to trade this pattern on a 1 min time frame. It's very, very good to use as an indicator though; very often, the 1-2 leg will equate the size of the 3-exit leg. This gives you an idea of where to expect a turning point and where not to buy/sell. I've also found that a good place to buy or sell after these turning points is below or at the 10 or 20 day EMA.
Having read Ross on intraday trading and trading the dailies, it seems that he much preferred trading this pattern off the dailies rather than the intraday charts.
I really don't think the 123 is very good at all to trade on the one minute. Has anyone traded it successfully on the dailies? If so, how many bars do you use to define your setup and what markets do you trade it on? Does anyone know what the expectancy of this pattern is and have they back-tested it?

From what I read here and from what you have said, this looks like partial Elliott Wave method...................Buy Elliott Wave Theory by Frost and Prechter published in 1978, and read it about 15 or 20 times and you will be a good trader...

Good trading,
JahDave

 

[prochargedmopar]

I'll catch up later.However in daytrading many of these hooks fail like this one just has on apple.
Many day traders know all these set ups written in the books,they know what all the rules for entry are and traders will anticipate the public coming in at these points and sell out to them.

Just starting to read this thread but this guy has lost it. If the market was trending UP. How did the "public" trader lose in this situation? 123 high, and start selling with the "daytraders". Profits from UP trend would have already been booked.


Rules state no buying after 4th bar of correction.(check your instruments personality)

 

[Geofract]

Yeah, all the hooks on that Apple example were working out!? Just in case you didn't notice, they were on a M1 chart! Heck!

 

[gforce1]

I'll catch up later.However in daytrading many of these hooks fail like this one just has on apple.
Many day traders know all these set ups written in the books,they know what all the rules for entry are and traders will anticipate the public coming in at these points and sell out to them.

Hey Naz and y'all. Old post I know, but enjoying the thread. On these 3 charts posted, I can see the 1-2-3 set ups worked a few times, except no trade on one? I have no knowledge of the hook, and maybe in these trades ignorance is bliss. lol. Thanks for the charts. G

 

[timsk]

Hey Naz and y'all. Old post I know, but enjoying the thread. On these 3 charts posted, I can see the 1-2-3 set ups worked a few times, except no trade on one? I have no knowledge of the hook, and maybe in these trades ignorance is bliss. lol. Thanks for the charts. G

Hi gforce1,
Just so you know, Naz rarely graces us with his presence these days, so I doubt he'll reply to your post.
Tim.

 

[gforce1]

Hi gforce1,
Just so you know, Naz rarely graces us with his presence these days, so I doubt he'll reply to your post.
Tim.

No worries, thanks Tim. Quality discussion here. Geez, the 123 and RH sure gets pulled apart and analysed, and with cameo's by JR himself! Cool stuff.

G

 

[darktone]

Me to.

Nice idea for a thread though Roberto. I like Joes stuff in the main and am an indirect user of the traders trick entry.... of a sort anyways

Lard Jebus!

 

[darktone]

My view is that if you have a set up that is in lots of books and the public domain,the public will trade it and stick to the rules. I can look at an intra day chart at times and say oh yes that's where the public will enter, because thats one of those such and such set ups.As a day trader isn't better to be in before them and let their late entries boost your profit and if it wobbles sell out.

If it runs then you've got a great trade if it has a problem you can get out flat or with something small.

To me it makes sense to anticipate moves not take positions where the majority will enter, because in many cases who else is left to come in,invariably no one and we sell off.

Yep

It is not a matter of risk, but a perception of opportunity. If you dither, and wait for confirmation, the opportunity that presents itself may not go away altogether, but remain, but with less advantage to the player, do you get my drift on this?

The risk element is a different argument altogether.

In fact the risk increases if you wait too long, because then the ingredient of advantage is impaired.

This is spot on! Even with the disadvantage of being a socrates post