A vastly experienced trader, educator, author, and inventor of the famous 'Ross Hook', Joe Ross took some time out of his busy schedule to talk to Trade2Win.
How long have you been trading for?
46 years.
How did you first get involved in trading?
I was taught by my great uncle Julius.
Do you remember your first trades?
Yes, it was a cotton trade. My uncle had a seat on the cotton exchange.
What were your first few months like? Were you profitable initially?
My first few months I was petrified. But I traded profitably under my uncle's supervision.
Has your trading style changed radically from when you first started?
No! I was taught discipline and self-control. I was taught to find the markets and time frames that best suited my trading style. I have always done it that way.
How did you learn to trade?
My uncle showed me what the market was all about. It taught me how the market moves and why. Once I had that knowledge, I was able to develop a trading style that fit my personality.
Are you a self-taught trader, or did another trader teach you worthwhile lessons?
My uncle taught me self-discipline and how to approach trading. Once that was done (1 ½ years), I became a self-taught trader insofar as technique. I developed my own strategies and tactics to carry out those strategies to completion.
What markets do you trade?
I will trade any market in which I can make money. I trade stocks, futures, options and forex.
What is your basic approach in analyzing and trading the markets?
I follow a regular procedure: 1. Determine which market(s) best fit my immediate trading goals. 2. Choose a trading style to fit that market(s). 3. Determine how best to trade that market(s). Determine what are reasonable trading objectives. 4. Determine trading size. 5. Determine stop placement.
How would you define your trading style?
Eclectic. I go where the money is to be made.
How often do you make a trade?
That depends on the market(s) I'm trading. I make a great effort to not overtrade. By that I mean I don't trade any more often than I need to, nor do I trade any size larger than I need to, to meet my trading goals.
Do you prefer to trade long or short and why?
Makes no difference to my. I'm dyslexic. Up or down look about the same.
How do you pick your trades?
Very carefully, according to my preset rules.
Is there anything you can single out as the most important element in deciding to put on a trade?
It must look right, feel right, and have my name on it.
Do you use trading systems?
Sometimes, but only ones I develop myself, and with the realization that no trading system will work for very long. I always have another one ready to go when the current one stops working. But mostly I trade from what I see.
How much do you risk on any single trade?
I will never risk more on a trade than the amount I have set for my first objective.
Do you use stop or limit orders?
Sometimes. I believe the type of order used must fit the strategy you are attempting to complete. Orders are strategic. If you can't get the job done, what good is the strategy? As much as I'd like to, I can't buy "market on low." But I could certainly come up with some wonderful trading strategies if I could.
Do you use chart patterns such as reversals and breakouts?
Sure. All patterns deserve some attention. But I prefer well defined trading patterns that are currently working in the market.
Do you use Level 2 data to trade?
No! Level 2 is a distraction, as far as I'm concerned. I see very little value in Level 2 data. I want my focus entirely on the price action. Level 2 is very convenient for those who would like to fake me out, and make me think the market is going one way when, in fact, it is going the other way.
Do you decide where you are getting out before you get in on a trade?
Part of my position is determined ahead of getting into a trade. The rest is taken out with trailing stops.
How do you decide when to take profits?
Pretty simple: When they are there! If I have profits in a trade you will not easily get me to give them up.
Is slippage/bad fills a problem in your trading?
Not usually.
Do you use the opinions of other traders in making trading decisions, or do you operate completely solo?
Opinions are worthless in the markets. I don't even trade my own opinion. I can't help but have one based on what I see. But I write it down in order to express it, and then crumple it up and throw it in the trash. I trade solo, based strictly on what I see.
What are the trading rules you live by?
Keep losses small and controlled and the winners will take care of themselves.
Do you believe chart reading can be used for successful trading?
Absolutely! As far as I'm concerned chart reading is the only way to go. The chart shows you the most current information possible on which you can make a decision.
Are there any technical indicators that you have found to be particularly valuable?
Bollinger Bands when I want to trade option boxes in a sideways market. Commodity Channel Index when I want to stay in a trend longer than you might normally stay in.
What are your thoughts about using fundamental analysis as an input in trading?
I never use it. I haven't the time, money, or research capabilities to properly trade from fundamentals.
Do you ever use contrary opinion as an aid to trading?
Only for my personal stock trading and investments.
How important is having a sound risk/money-management philosophy?
If you want that on a scale of 1 - 10, I would say a 10.
Which brokers do you use and why?
I use a broker at Refco. I am happy to pass his name on to anyone who is interested. This is a broker who I have personally trained, and who knows how I and my students trade. I stay on top of him like flies on sugar. I want to make sure he executes in the ways I demand of him. I want a broker who is extremely responsive. It has taken 3 years to get him where I want him to be. I use this broker for all of my futures and options trading. However, for forex trading, there is only one satisfactory broker on this planet. I will refer people to him if they are interested.
What software do you use and why?
This is not a fair question for me to answer. I use a number of different trading programs, but I receive them all gratis. Some are good for one thing and some are good for other things. I have never found the perfect software. I gave up looking a long time ago. But for those who want to know I will list them in alphabetical order. Each has its own merits and shortcomings.
1. Aspen Graphics
2. Genesis Financial Data Systems
3. NexTrend
4. Market Detective
Do you have an opinion about trading systems sold to the public?
Most of them are not worth the paper they are written on.
Do you feel a good system can compete with a good trader?
At times, yes. In the long run, no way!
In your trading experience, is there one particular trade that stands out as the most dramatic?
Yes! I was short the British Pound in February of 1991. I made a fortune from it.
What is the most prominent fallacy in the public's perception about trading?
That it is easy and that you can get rich quick.
How much of a role does luck play in trading success?
For one or two trades, luck can play a part. Beyond that, luck has nothing to do with successful trading.
How important is gut feel?
For me it is very important. But I know very successful traders who do not have the benefit of it.
How do you judge success in your trades?
I feel a trade is successful if it has met my trading goals - which are not necessarily money goals. Sometimes you need to know that you did what you were supposed to do, even though you had a loss on the trade.
What are the most important elements to becoming a successful trader?
Self-control and self-discipline, along with good trade, risk, and money management - in that order.
Can you describe one of your most successful trades?
Probably the most successful trade I ever made happened strictly because I did not lose my composure. I was short soybeans when the Chernobyl explosion occurred. I was looking at limit up. There was no way out for about 3 days. Limit up every day as I recall. I did not panic. I reasoned that because soybeans were not grown in the former Soviet Union, that the soybean market would have to come down. It did, and I shorted it from its panic highs. I ended up doing quite well overall on the trade.
Is the joy of winning as intense as the pain of losing?
Not for me. Losing is a much more emotional experience.
Why do most traders lose?
They have the wrong anticipations about trading and markets. This, coupled with genuine ignorance of the things that really should know but which are generally not taught, virtually guarantees that they will lose.
When you do hit a losing streak, how do you handle it?
I stop trading immediately. I do not begin again until I've figured out what was wrong.
Is the ability to accept losses a characteristic of a winning trader?
Yes. All businesses have losses. I can't name one that doesn't. Why should it be any different for trading?
What was your worst time trading? What went wrong?
My worst time trading came when I was not paying close enough attention to the price action while still being in a trade. It cost me $40,000. I was tutoring a student and paying more attention to him than I was to the market. Before I knew it, I was down forty grand. Trading requires your full attention. Most of my worst trades have come when I was distracted. I have learned to never have a trade on while
traveling, giving a seminar, tutoring someone, or when someone needs to consult with me about anything.
Can you describe any specific trading mistakes that you learned from?
One comes to mind. Never think you can buy back and roll out of a short option in order to buy time. You never know but what the exchange will raise the margins to the point where you can no longer cover. It never happened to me, but some of my best friends have been wiped out when making that mistake.
Are there any books you have read, that you would recommend to people?
To be honest, I read very few books. I am dyslexic. Reading books is very difficult for me, especially trading books. My number one best book is the Holy Bible. I have read it and re-read it many times, especially the book of Proverbs.
What is the most important advice you can give the average trader?
Find out who you really are. Discover what makes you tick. Face what you are and deal with it.
What advice do you have for the beginner trader?
Find out everything you can about markets and how they work before you start trading. Do not look for anything magic, it doesn't exist. Do not be in a hurry to rush into trading. You will have to work hard to find out what it is really all about.
What are the traits of a successful trader?
That is the million dollar question. I don't think anyone knows. There have been many who have tried to find out, but I don't think they ever succeeded. Successful traders can be as different from one another as night is from day. I have taught and trained thousands of traders. I can never tell a good one from a bad one.
Do you enjoy working from home?
Yes. That's the way I've always traded.
What environment do you trade in, for example do you have a separate office, multiple monitors and CNBC on the telly?
I have a trading office with multiple monitors. But CNBC? Come on, give me a break. CNBC may be the best comedy show on TV, but I don't think it's funny at all.
What effect has trading had on your personal life?
You might say that trading is my life. I really know how to do little else. I write about trading , teach trading, and trade. But trading has given me most of the things I ever wanted.
Do you sometimes need to get away from the market for a few days?
Yes! I get away from it often. I take two one-month vacations a year. I have a prison ministry which gets me away from the markets for 1-4 days every month. I look for any excuse to get away. Trading is intense. Frequent breaks are the way to go.
Is trading for a living firstly viable and secondly desirable?
Yes, and yes! I've made my living at it all of my adult life. If you don't try to make a job out of it, it is quite pleasurable. The problem with most aspiring traders is that they turn trading into a job. They are at it day and night. That's not how trading is supposed to be. You become a trader so you can have a life of leisure. Trading is freedom, not slavery. A trader can live and work anywhere in the world where he can obtain a telephone connection. I know, I've traded on my laptop from a mountain top in South Africa. All I had was a phone line operated from a solar panel and a battery.
If you weren't trading what would you want to spend your time doing?
Teaching others how to trade, and raising money for my prison ministry. It's called "Second Chance Ministry International." People coming out of prison need help in getting back into society and becoming fully functional. They have paid their debt to society. We have a very high success rate of ex-prisoners who have never gone back.
Do you have any goals at this point?
To trade, teach, and write until I am no longer able.
Do you still see yourself trading ten or fifteen years down the road?
Absolutely. Trading is my life.
When you make your first million, what will you spend the money on?
I made my first million long ago. The hospitals got most of it by keeping me alive. My second million has gone to support my ministry. My next million will go to helping people in need. There is always need somewhere.
Any comments about T2W?
T2W is doing a fine service. There is an endless need for education in the business of trading. People come into it faster than they can be properly educated.
Any last words?
There's much more to life than making money and getting rich. Life is far more rewarding when you can reach out to others and give them a helping hand. You never know when the smallest gesture of kindness will bring about a complete turn in the life of another person. When you become a successful trader, you have a choice. You can focus entirely on yourself and your materialist desires, or you can use the money to improve the lives of others. The choice is always yours.
Starting Out
How long have you been trading for?
46 years.
How did you first get involved in trading?
I was taught by my great uncle Julius.
Do you remember your first trades?
Yes, it was a cotton trade. My uncle had a seat on the cotton exchange.
What were your first few months like? Were you profitable initially?
My first few months I was petrified. But I traded profitably under my uncle's supervision.
Has your trading style changed radically from when you first started?
No! I was taught discipline and self-control. I was taught to find the markets and time frames that best suited my trading style. I have always done it that way.
How did you learn to trade?
My uncle showed me what the market was all about. It taught me how the market moves and why. Once I had that knowledge, I was able to develop a trading style that fit my personality.
Are you a self-taught trader, or did another trader teach you worthwhile lessons?
My uncle taught me self-discipline and how to approach trading. Once that was done (1 ½ years), I became a self-taught trader insofar as technique. I developed my own strategies and tactics to carry out those strategies to completion.
Trading - In Practice
What markets do you trade?
I will trade any market in which I can make money. I trade stocks, futures, options and forex.
What is your basic approach in analyzing and trading the markets?
I follow a regular procedure: 1. Determine which market(s) best fit my immediate trading goals. 2. Choose a trading style to fit that market(s). 3. Determine how best to trade that market(s). Determine what are reasonable trading objectives. 4. Determine trading size. 5. Determine stop placement.
How would you define your trading style?
Eclectic. I go where the money is to be made.
How often do you make a trade?
That depends on the market(s) I'm trading. I make a great effort to not overtrade. By that I mean I don't trade any more often than I need to, nor do I trade any size larger than I need to, to meet my trading goals.
Do you prefer to trade long or short and why?
Makes no difference to my. I'm dyslexic. Up or down look about the same.
How do you pick your trades?
Very carefully, according to my preset rules.
Is there anything you can single out as the most important element in deciding to put on a trade?
It must look right, feel right, and have my name on it.
Do you use trading systems?
Sometimes, but only ones I develop myself, and with the realization that no trading system will work for very long. I always have another one ready to go when the current one stops working. But mostly I trade from what I see.
How much do you risk on any single trade?
I will never risk more on a trade than the amount I have set for my first objective.
Do you use stop or limit orders?
Sometimes. I believe the type of order used must fit the strategy you are attempting to complete. Orders are strategic. If you can't get the job done, what good is the strategy? As much as I'd like to, I can't buy "market on low." But I could certainly come up with some wonderful trading strategies if I could.
Do you use chart patterns such as reversals and breakouts?
Sure. All patterns deserve some attention. But I prefer well defined trading patterns that are currently working in the market.
Do you use Level 2 data to trade?
No! Level 2 is a distraction, as far as I'm concerned. I see very little value in Level 2 data. I want my focus entirely on the price action. Level 2 is very convenient for those who would like to fake me out, and make me think the market is going one way when, in fact, it is going the other way.
Do you decide where you are getting out before you get in on a trade?
Part of my position is determined ahead of getting into a trade. The rest is taken out with trailing stops.
How do you decide when to take profits?
Pretty simple: When they are there! If I have profits in a trade you will not easily get me to give them up.
Is slippage/bad fills a problem in your trading?
Not usually.
Do you use the opinions of other traders in making trading decisions, or do you operate completely solo?
Opinions are worthless in the markets. I don't even trade my own opinion. I can't help but have one based on what I see. But I write it down in order to express it, and then crumple it up and throw it in the trash. I trade solo, based strictly on what I see.
Trading - The Theory
What are the trading rules you live by?
Keep losses small and controlled and the winners will take care of themselves.
Do you believe chart reading can be used for successful trading?
Absolutely! As far as I'm concerned chart reading is the only way to go. The chart shows you the most current information possible on which you can make a decision.
Are there any technical indicators that you have found to be particularly valuable?
Bollinger Bands when I want to trade option boxes in a sideways market. Commodity Channel Index when I want to stay in a trend longer than you might normally stay in.
What are your thoughts about using fundamental analysis as an input in trading?
I never use it. I haven't the time, money, or research capabilities to properly trade from fundamentals.
Do you ever use contrary opinion as an aid to trading?
Only for my personal stock trading and investments.
How important is having a sound risk/money-management philosophy?
If you want that on a scale of 1 - 10, I would say a 10.
Trading - The Tools (Brokers & Systems)
Which brokers do you use and why?
I use a broker at Refco. I am happy to pass his name on to anyone who is interested. This is a broker who I have personally trained, and who knows how I and my students trade. I stay on top of him like flies on sugar. I want to make sure he executes in the ways I demand of him. I want a broker who is extremely responsive. It has taken 3 years to get him where I want him to be. I use this broker for all of my futures and options trading. However, for forex trading, there is only one satisfactory broker on this planet. I will refer people to him if they are interested.
What software do you use and why?
This is not a fair question for me to answer. I use a number of different trading programs, but I receive them all gratis. Some are good for one thing and some are good for other things. I have never found the perfect software. I gave up looking a long time ago. But for those who want to know I will list them in alphabetical order. Each has its own merits and shortcomings.
1. Aspen Graphics
2. Genesis Financial Data Systems
3. NexTrend
4. Market Detective
Do you have an opinion about trading systems sold to the public?
Most of them are not worth the paper they are written on.
Do you feel a good system can compete with a good trader?
At times, yes. In the long run, no way!
Trading Experiences
In your trading experience, is there one particular trade that stands out as the most dramatic?
Yes! I was short the British Pound in February of 1991. I made a fortune from it.
What is the most prominent fallacy in the public's perception about trading?
That it is easy and that you can get rich quick.
How much of a role does luck play in trading success?
For one or two trades, luck can play a part. Beyond that, luck has nothing to do with successful trading.
How important is gut feel?
For me it is very important. But I know very successful traders who do not have the benefit of it.
Success & Failure
How do you judge success in your trades?
I feel a trade is successful if it has met my trading goals - which are not necessarily money goals. Sometimes you need to know that you did what you were supposed to do, even though you had a loss on the trade.
What are the most important elements to becoming a successful trader?
Self-control and self-discipline, along with good trade, risk, and money management - in that order.
Can you describe one of your most successful trades?
Probably the most successful trade I ever made happened strictly because I did not lose my composure. I was short soybeans when the Chernobyl explosion occurred. I was looking at limit up. There was no way out for about 3 days. Limit up every day as I recall. I did not panic. I reasoned that because soybeans were not grown in the former Soviet Union, that the soybean market would have to come down. It did, and I shorted it from its panic highs. I ended up doing quite well overall on the trade.
Is the joy of winning as intense as the pain of losing?
Not for me. Losing is a much more emotional experience.
Why do most traders lose?
They have the wrong anticipations about trading and markets. This, coupled with genuine ignorance of the things that really should know but which are generally not taught, virtually guarantees that they will lose.
When you do hit a losing streak, how do you handle it?
I stop trading immediately. I do not begin again until I've figured out what was wrong.
Is the ability to accept losses a characteristic of a winning trader?
Yes. All businesses have losses. I can't name one that doesn't. Why should it be any different for trading?
What was your worst time trading? What went wrong?
My worst time trading came when I was not paying close enough attention to the price action while still being in a trade. It cost me $40,000. I was tutoring a student and paying more attention to him than I was to the market. Before I knew it, I was down forty grand. Trading requires your full attention. Most of my worst trades have come when I was distracted. I have learned to never have a trade on while
traveling, giving a seminar, tutoring someone, or when someone needs to consult with me about anything.
Can you describe any specific trading mistakes that you learned from?
One comes to mind. Never think you can buy back and roll out of a short option in order to buy time. You never know but what the exchange will raise the margins to the point where you can no longer cover. It never happened to me, but some of my best friends have been wiped out when making that mistake.
Advice
Are there any books you have read, that you would recommend to people?
To be honest, I read very few books. I am dyslexic. Reading books is very difficult for me, especially trading books. My number one best book is the Holy Bible. I have read it and re-read it many times, especially the book of Proverbs.
What is the most important advice you can give the average trader?
Find out who you really are. Discover what makes you tick. Face what you are and deal with it.
What advice do you have for the beginner trader?
Find out everything you can about markets and how they work before you start trading. Do not look for anything magic, it doesn't exist. Do not be in a hurry to rush into trading. You will have to work hard to find out what it is really all about.
What are the traits of a successful trader?
That is the million dollar question. I don't think anyone knows. There have been many who have tried to find out, but I don't think they ever succeeded. Successful traders can be as different from one another as night is from day. I have taught and trained thousands of traders. I can never tell a good one from a bad one.
The View From The Floor
Do you enjoy working from home?
Yes. That's the way I've always traded.
What environment do you trade in, for example do you have a separate office, multiple monitors and CNBC on the telly?
I have a trading office with multiple monitors. But CNBC? Come on, give me a break. CNBC may be the best comedy show on TV, but I don't think it's funny at all.
What effect has trading had on your personal life?
You might say that trading is my life. I really know how to do little else. I write about trading , teach trading, and trade. But trading has given me most of the things I ever wanted.
Do you sometimes need to get away from the market for a few days?
Yes! I get away from it often. I take two one-month vacations a year. I have a prison ministry which gets me away from the markets for 1-4 days every month. I look for any excuse to get away. Trading is intense. Frequent breaks are the way to go.
Is trading for a living firstly viable and secondly desirable?
Yes, and yes! I've made my living at it all of my adult life. If you don't try to make a job out of it, it is quite pleasurable. The problem with most aspiring traders is that they turn trading into a job. They are at it day and night. That's not how trading is supposed to be. You become a trader so you can have a life of leisure. Trading is freedom, not slavery. A trader can live and work anywhere in the world where he can obtain a telephone connection. I know, I've traded on my laptop from a mountain top in South Africa. All I had was a phone line operated from a solar panel and a battery.
If you weren't trading what would you want to spend your time doing?
Teaching others how to trade, and raising money for my prison ministry. It's called "Second Chance Ministry International." People coming out of prison need help in getting back into society and becoming fully functional. They have paid their debt to society. We have a very high success rate of ex-prisoners who have never gone back.
And Finally
Do you have any goals at this point?
To trade, teach, and write until I am no longer able.
Do you still see yourself trading ten or fifteen years down the road?
Absolutely. Trading is my life.
When you make your first million, what will you spend the money on?
I made my first million long ago. The hospitals got most of it by keeping me alive. My second million has gone to support my ministry. My next million will go to helping people in need. There is always need somewhere.
Any comments about T2W?
T2W is doing a fine service. There is an endless need for education in the business of trading. People come into it faster than they can be properly educated.
Any last words?
There's much more to life than making money and getting rich. Life is far more rewarding when you can reach out to others and give them a helping hand. You never know when the smallest gesture of kindness will bring about a complete turn in the life of another person. When you become a successful trader, you have a choice. You can focus entirely on yourself and your materialist desires, or you can use the money to improve the lives of others. The choice is always yours.
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