Unlike many traders, Ryan steers clear of buying stocks during their initial rallies and avoids selling them at their peak
To mitigate risk, Sean Ryan takes a straightforward step. When a stock’s price reaches the point where he entered the trade and breaks even, he sets a sell-stop order.
Sean Ryan has a simple yet effective approach to finding winning stocks. He seeks out stocks that exhibit sideways movement for a period and then experience a sudden rally. It is during this second uptrend that Ryan makes his entry.
Discovering the world of stock trading was no mere coincidence for Sean Ryan. The roots of his passion can be traced back to his father, David Ryan, a highly accomplished trader who clinched the prestigious US Investing Competition title for an unprecedented four consecutive years. Norman Zadeh, the competition’s founder, attests to David Ryan’s remarkable feat. Inspired by his father’s resounding success, Sean Ryan made an early decision to forge a full-time career in trading, driven by the allure of financial independence and the freedom to explore the world.
Now, at the age of 29, Sean has not only followed in his father’s footsteps but also carved out his own path to success. In the 2022 annual championship, he secured a commendable third place in the stock division. Insider, after scrutinizing his brokerage statements, confirms that he achieved an impressive return of 132%. Such a feat becomes even more remarkable when considering that the stock market experienced its most challenging year since the 2008 financial crisis.
Yet, Sean Ryan’s accomplishments are not confined to a single lucky year. His participation in the competition dates back to 2019, with consistently outstanding performances. According to Zadeh, he achieved a return of 51.8% in his inaugural year, despite joining the competition late. In 2020, he further solidified his position with a remarkable return of 128%, followed by a respectable 18% return in 2021.
After completing his studies in business administration at The Master’s University in 2016, Sean dedicated two years to learning the art of trading under his father’s expert guidance. During this invaluable period, he mastered the art of deciphering stock charts and conducting thorough analyses of a company’s fundamentals, including its earnings reports.
However, in recent years, Sean Ryan has adopted a different approach. He confesses to discarding traditional fundamental analysis and embracing a strategy solely based on technical analysis of stock charts. He found that focusing on a company’s narrative, such as its projected earnings or quality of management, could cloud his judgment. Over time, he honed his skills, emphasizing the insights offered by charts alone.
Sean elaborates on his trading philosophy, stating, “If you believe a company will release impressive earnings while its stock price is declining, you might be inclined to hold on longer. Yet, if you simply examine the chart, it might signal an early exit.” This revelation highlights his unwavering faith in the power of technical analysis to guide trading decisions.
While Sean acknowledges that he gained substantial knowledge from his father’s tutelage, he emphasizes that the most invaluable lesson he learned was not a specific trading strategy, but rather his father’s market approach—an inherent trait in his father’s personality. Ryan explains that his father’s humility allows him to remain adaptable and flexible in the face of changing market conditions. If a trade turns against him, he readily admits his mistake and promptly exits the position. This indispensable mindset, according to Sean, cannot be acquired solely from textbooks; it requires direct experience and the acceptance of multiple failures. Through these trials, one gradually realizes that the market is an untamable beast, demanding the ability to adjust when proven wrong.
Sean Ryan’s journey as a trader exemplifies the intersection of passion, mentorship, and personal growth. Inspired by his father’s triumphs, he has crafted his own path to success, blending technical analysis with a humble and adaptable mindset. As his story continues to unfold, the allure of the stock market and the thrill of the unpredictable beckon him toward new frontiers, all while inspiring others to pursue their own dreams of financial independence.
6 Key Takeaway Tips from Ryan’s Successful Trading Approach
Learning from the wisdom and experience of seasoned traders can provide invaluable insights for those venturing into the world of stock trading. Sean Ryan, a prominent trader who has achieved remarkable success, shares six essential tips that can enhance your trading strategies and mindset.
Embrace the Art of Losing: According to Ryan, one of the most crucial trading tips is learning how to accept losses gracefully. He emphasizes the importance of promptly selling a falling stock to limit potential losses. To quantify his risk, Ryan sets hard stops, ensuring that no loss exceeds 1% of his total trading portfolio. By adhering to this strict rule, traders can protect themselves from significant downturns and potentially save themselves from unnecessary losses.
Mitigate Risk with Sell-Stop Orders: Ryan adopts a risk-mitigation strategy by setting sell-stop orders when a stock’s price is up by 10%. These orders are placed at his breakeven price—the price at which he entered the trade. If the stock’s price falls below this set price, triggering the order, Ryan secures a risk-free trade. However, it’s important to note that this approach carries some risk, particularly in cases where a stock’s price plummets rapidly, potentially resulting in the order not being filled in time.
Seek Stocks with Calm Before the Storm: As a swing trader, Ryan looks for stocks that have been moving sideways for a few weeks before suddenly experiencing an upward price surge. This increase can range from 20% to 100% within a couple of weeks. Ryan associates this pattern with the calm before the storm, where the stark contrast between stagnation and sudden movement signifies a significant shift in the market. He identifies this as a signal that the stock may be poised for further momentum.
Avoid Chasing Extremes: Ryan avoids buying during the initial breakout or selling at the peak price of a stock. Recognizing the difficulty in timing the market precisely, he exercises patience and waits for the stock to settle down after the first breakout. After a few days or weeks, if the stock begins to show signs of a second rally, he enters a position. By aiming to capture the middle section of a stock’s movement, Ryan mitigates the risks associated with trying to predict the extremes.
Identify the Market’s Rhythm: Observing patterns in the market, Ryan has noticed that it often moves in waves of three, either upwards or downwards, regardless of the timeframe. Whether it’s three significant moves over a month or three smaller moves within a day, this pattern persists. Ryan recognizes that each subsequent move carries increasing risk, and he advises traders to be mindful of this progression. By understanding the market’s rhythm, traders can strategically navigate the various stages of a stock’s movement.
Harness the Power of Technical Indicators: Ryan highlights the significance of paying attention to technical indicators, such as the relative strength index (RSI). Regardless of a stock’s price action, the RSI measures its strength or weakness based on recent closing prices. If a stock’s price is rising while the RSI weakens, it indicates that the rally may be nearing its end. Ryan shares that he has observed instances where stocks continue to climb while the RSI drops, providing an excellent opportunity to exit before the stock begins to decline.
