Charles B. Goodman lived the markets from the late 1930s to the time of his passing in the early 1980s. During that time, he developed the Goodman Wave Theory in great detail, the foundations of market environments, and tied everything together in a nice, neat method of trading.
He often taught by simply pointing to a chart and saying, “There is your return, Dad,” leaving me to scurry home to my charts to divine what was in fact a return. I learned bathtub analysis early, and perhaps that was his idea! When I told him what I thought something meant later, he would look at me a bit odd and say “What else did you think it meant?”
Much of his wisdom came from sayings and short anecdotes. The reader by now is familiar with a few of them such as “Sit on your hands, Dad; sit on your hands.” This chapter provides a compendium of all of them that I can today remember.
Wisdom, we know, is one step higher than knowledge, which is one step higher than information.
“Sit on your hands, Dad; sit on your hands!”
This was meant two ways. First, do not overtrade. Wait for the crème de la crème opportunities. Second, once in a trade, bring your S/L to breakeven, relax, and see how much the market wants to give to you. “Set and forget!” he would say to me. Or, “Don’t pick at it; you will just make it bleed.”
All markets make wonderful long trends—and not infrequently. In FOREX, 500-plus pip moves are common. Huge trends of two or three times that can be seen on ...