T3 Live

Meet the Traders: How Ryan Tonking Learned the Biggest Trading Lesson of His Life


To help you get to know T3 Live’s growing bench of trading talent, we’ve launched a series called “Meet the Traders” so you can get an inside look at how our team operates.

Today, we are proud to introduce you to Ryan Tonking, one of our moderators in the T3 Live Black Room.

1) Welcome Ryan! Tell us about yourself.

My introduction to the stock market came at a young age when I started working on a peach farm in Ringoes, New Jersey.

Working on a farm taught me the value of hard work, which carried right into my trading.

Once I began making my own money, my father began teaching me about mutual funds.

He helped me open a brokerage account and I bought two mutual funds: an S&P 500 fund and a Ginnie Mae fund.

Both of them did well, and I became fascinated with making money without actually going to work.

I started reading everything I could about Warren Buffet and fundamental analysis. I wasn't even aware that technical analysis even existed.

2) How Did You Get Interested in Technical Analysis?

I started trading stocks more seriously when I was a student at Delaware Valley University.

I was working during market hours, so I was actually trading from my iPhone. I was sneaking around, hiding from my coworkers while placing trades.

Up until this point, I was all about fundamentals.

But I honestly became bored with them, and I wanted something new.

3) So How Did Your Approach Change?

I noticed that the top gainers in the morning often closed higher than where they opened.

So I started buying those top gainers and holding them until the close.

This strategy worked like a charm and I doubled my money in two months.

Unfortunately, I didn't know what a stop was, and I started increasing my position size.

Then one day, I took a big position in a stock called North Spring Resources.

I bet you can guess where this is going!

In 30 minutes, I lost 55% of my account.

Yep, I burned two months worth of profit — and then some — in a half hour.

4) How Did You Get Over That Big Loss?

I was discouraged, but I wanted to stick with trading.

So I focused on learning how I could avoid losses like that in the future.

I started reading about risk management, and I learned that even highly successful traders had similar experiences.

A trader gave me the book “The Disciplined Trader” by Mark Douglas.

I read it in two days. And that's when things really changed for me, and I got on the road to becoming a professional trader.

My entire process changed. I learned about overcoming mental barriers to success, and I had a completely different view of what makes markets move.

From there, I started developing entry and exit plans based solely on chart patterns.

And most importantly, I developed a position sizing method to control my risk.

5) What is the 1 thing you wish you knew when you started as a trader?

That you can never really know what's going to happen next in the market.

That's why you need discipline and a strategy that helps you adapt to what's happening.

6) Do you believe in setting specific stop loss and target prices?

Yes, I do.

As I told you before, I had to suffer some rather large losses to start using stops.

But I never trade without one.

In fact, I wouldn't even be able to size my positions without a stop, because I always want to know exactly how many dollars I have on the line.

I also have specific target prices when I place my orders.

When a  position approaches its target area, I trail my stop.

7) Are you concerned about high-frequency and algorithmic grading?

The more efficient the market is, the harder it is to get an edge.

However, as long as you can adapt to the market environment, you can find opportunities to make money

8) What do you think about Bitcoin and other cryptocurrencies?

I like the idea of cryptocurrencies.

From a trading standpoint, right now (November 30, 2017), I see a Climactic Sell Setup in Bitcoin, which is the sign of a mania.

But these extreme fluctuations are a natural part of any new instrument's development cycle in a free market.

9) What do you do in your free time away from trading?

I enjoy playing golf.

There are many parallels between golf in trading. They offer the same psychological challenges, and they both punish mistakes immediately.

Golf's taught me more trading lessons than I can count.

10) If you weren't a trader, what would you be doing with your life?

It's hard to say.

But I have a natural entrepreneurial drive, and if I didn't go into trading, I'm sure I'd start a small business.

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