The Goodman Method of Trading
Saturday, January 7, 2012 09:00 MST » 11:00 EST
Our guest speaker for our January 7th, 2012 DTG meeting will be Duane Archer. Years ago Duane was mentored by a successful futures trader by the name of Charlie Goodman. Charlie had developed a unique trading method and philosophy which did not rely on any calculated technical indicator. On January 7th, Duane will present the "Goodman Method of Trading" to the DTG in the following three sessions:
- Session 1 -The Goodman Method Landscape
The Goodman Landscape provides an introduction and overview of Goodman Wave Theory and the structural ideas of the Goodman Method.
The Goodman Method is a complete approach to trading, encompassing a trading system (Goodman Wave Theory / GWT) an integrated money management scheme (Goodman Waltz) and an approach to tracking and following the markets (Snowflaking).
The basics of Goodman are easy to learn and apply. The Goodman Wave Theory complements many other trading approaches.
1) A brief history of the development of the Goodman Method and GWT.
2) The Big Three principles of GWT and how it differs from Elliott Wave Theory.
Principle of Propagation
Principle of Intersection
3) The three Goodman trade setups.
Propagation Trade Setup (PTS)
4) The Snowflake Process
Goodman uses a sifting process to find trade candidates, going from the most general to the most specific chart features. The trader looks 'outward' to a higher time frame chart to see where the trade is in the larger scheme of things. The trader looks 'inward' to a smaller time frame chart to find an entry point.
Overlays are Goodman chart features which determine the strength and reliability of the trade candidate. The trader qualifies a basic setup step-by-step.
5) The Goodman Waltz Money Management scheme.
The Waltz is derived directly from Goodman Wave Theory and is not ad hoc as is so often the case. Specific stop-loss and take-profit targets are provided from the Wave analysis.
- Session 2 - The Propagation Trade Setup
The PTS is the perfect setup for the busy trader. It is an easy way to test-drive Goodman to see if it works for you or might complement your current trading tools.
1) A detailed PTS trade walkthrough with chart examples.
2) Attendees will be provided a copy of the PTS Templates in PPT. These are the 27 PTS templates which may be analyzed in groups for specific trading characteristics.
3) The Bombay PTS is a highly reliable formation found on several templates.
- Session 3 - Charlie's Technical Analysis Tricks of the Trade
A potpourri of ideas, chart formations, technical insights from the work of Charles Goodman:
1) The Short Swing Setup is a little known chart point which often portends at least a short-term price reversal.
2) The Diamond Bottom is a reliable chart pattern Mr. Goodman identified. It works well on long term charts.
3) Points and Stations on a chart can be used to identify support and resistance areas.
4) The Hidden 'X' and Hidden 'O' can be used to make measurements determining tops and bottoms of a trend.
5) Goodman Wave Theory may also be applied to the Time factor using the Goodman Cycle Count System.
6) The Line is a means of analyzing charts that saves a great deal of time, allowing more markets to be tracks. It also keeps the trader focuses and prevents making emotional decisions.
7) The Nofri-Goodman Formation is a chart pattern which combines Nofri congestion phases with Goodman Wave Theory.
8) Spread Triples may offer a key to the markets internal rhythm.
9) Pugh Charts were Mr. Goodman's method for analyzing the four basic bar types - inside, outside, bull and bear.
10) Pretzel Charts are similar to Candlesticks but offer more analytical possibilities.
About Our Speaker
Mr. Archer was mentored in the Goodman trading methods by Charles B. Goodman and was his only student. Over the years Archer has expanded, organized and codified both of Mr. Goodman's primary discoveries - Goodman Wave Theory (GWT) and Market Environments (ME). He has used them successfully in equities, futures and FOREX.
As a CTA in the 1980s Duane applied the Goodman methods to an expert system. He managed USD 20 million in the commodity futures arena and compiled a 48% annual return with exceptionally low risk parameters and high Sharpe ratio, as documented in Managed Account Reports. The program was featured in two issues of Futures as well as AI-Expert magazine.
He has authored and co-authored several books including: Getting Started in Currency Trading (John Wiley & Sons, 2005, 2008, 2010, 2012), The FOREX Chartist Companion(John Wiley & Sons 2006), Trading the Major Pairs (John Wiley & Sons, 2006), Getting Started in Forex Trading Strategies (2007) and Fifteen Essential FOREX Trades (John Wiley & Sons, 2009).
Duane Archer has been a commodity futures and FOREX participant for over 35 years. He has acted as a private trader, registered CTA and CPO, branch manager (Heinold of Hawaii) and SEC investment advisor. Archer was one of the first to do serious technical analysis research using a computer in the early 1970s and is recognized as an expert in the fields of artificial intelligence and machine learning applied to trading. He has presented technical papers to numerous academic proceedings, including: the Chicago Symposium on Artificial Intelligence ,The University of Chemnitz Conference on Machine Learning and Automata 2008.
Amount of historical data varies from 30 days to 14 years depending on the membership you choose.