INTERVIEW CENTRAL: Roy Kelly, Part II

Roy Kelly heads up a trading system development company called ARC Systems that primarily operates on the Trade Station platform. He brings a systems approach to thinking based on his numerous years in the systems trading arena. Roy Kelly is also a professional trader, lecturer, and author of the book The Trading Method That Can Make You Rich.

I really enjoyed speaking with Roy about how he manages risk as well as getting a feel for how he approaches the markets. This is the second part of that interview.

Optionetics: What are some of the key rules that you feel are most important for a trader or an analyst to keep in mind when evaluating any potential trading opportunity?

Roy:  I like to focus on (particularly for novice traders) the need to stay on the right side of the market—meaning trading in the direction of the trend.  I have four main trade setups I have developed over the years, and those are the ones I teach and trade.

Optionetics: What are your favorite markets that you like to trade and track with your analysis tools?

Roy:  They work well on any freely traded market. I personally like trading the ER2, ES, and YM (e-minis) because they have good price movement.  I use them for day trading and/or position trading. I have also used them on Mutual Funds with good results. In the past I have traded stocks, and options, and they work great with those markets, I guess what it comes down to is what market() I feel are gainfully tradable at the time as my tools allow me to adjust to the market() working equally well on all.

Optionetics: What is your most memorable trade?

Roy:  After doing this for over thirty-three years, that would be a little hard to remember. More recently the one I remember is when I entered a trade to the long side in the ER2.  No sooner did I enter the trade and the market shot up and instantly reached my target—very fast and very profitable. The best year I remember was in 1997 when my trading system was rated number one in the world by Futures Truth magazine.

Optionetics: With all the different technical as well as fundamental analysis tools out there how does a new trader avoid information overload or "analysis paralysis"?

Roy:  Yes, I understand, and I feel I have a good answer.  Since the arrival of the internet (keep in mind it has only been around 10 – 11 years) there has become thousands of websites out there dealing with trading.  The majority of them are nothing more than salesmen, marketing companies, and web designers trying to get a piece of the pie. My recommendation to anyone earnestly seeking information—rather than hype, high pressure sales, and/or good looking web sites—is to seek out those who were in the business before the internet.  Look for those with a good reputation in the trading business, such as George and myself.  It is very important to find someone with a good name and a good product. 

Optionetics: Thanks, John, for speaking about your trading ideas with our Optionetics reading audience.

To read previous installments of this interview, please click here.

Jeff Neal 
Senior Writer, Options Strategist & Profit Strategies Radio Show Market Correspondent
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