According to Joe Ross, a Ross Hook is created by:

• The first correction following the breakout of a 1-2-3 high or low.
• The first correction following the breakout of a Ledge.
• The first correction following the breakout of a Trading Range.

To put it in other words, a Ross Hook marks the beginning of a correction after a leg in the direction of the trend. When this correction begins, the price action trader is watching for its end and a buy (in an uptrend) or sell (in a downtrend) set up. The trend resumes when the price breaks the Ross Hook. Price action trading is actually that simple - you wait for a pull back during a trend and enter in the direction of the trend.

The Ross Hooks look like follows:

Uptrend

Downtrend