I met Bert Levy in the late 1980s, when his company did the underwriting for one of my commodity funds. We lost track of each other until one day around 2005 when I received a “Remember Me?” email. He had seen an article on Goodman Wave Theory.
We spoke and had a nice chat. He was comfortably retired and living in Evergreen, Colorado, with his wife. He wanted to get into trading a little and decided to take the Goodman course. We also connected over chess and even tried to start a chess club, but that did not get off the ground. Even after the course we stayed in touch and spoke fairly often about the markets.
The Silver Conundrum
Around 2010 we both felt Silver might be ready to move again. “How do we follow it?” was the question. We both remembered the 1970s, when the market took forever to move and just killed position traders by going back and forth between $6.00 and $9.00 an ounce.
So you want to be ready to go if the market takes off, but still do OK while it is wallowing. Quite a conundrum. Basically, how do you trade both a trending and a trading market at the same time? It seemed a complete impossibility, as the old Herman’s Hermits song might say.
If you follow the Goodman Line idea, you will do OK if the market soars, but you will never build a big position early and make a huge profit. We expected Silver to go back at least to the old highs of $50.00 an ounce. (Spoiler alert: it did!) If you follow the Gould Line idea, you will simply get killed in a sideways, trading market.
What to do? We spent many conversations and a lot of time discussing possibilities.
Bert’s Line
Finally, Bert came up with an idea: essentially, do both! Naturally, we christened it Bert’s Line. Here is the scheme. Divide your trading stake into three units:
- One unit is HOLD FOREVER.
- One unit is TRADE.
- One unit is PARLEY.
While this was designed for commodities, where trends of hundreds of percent are not uncommon, it may also be used in FOREX if you truly expect a major move. I have used it since early this year on the USDJPY, which I expect to get close to 200.00 in the long run.
My pal Bert passed away about five years ago. I think he was 82 at the time and had moved to Scottsdale, Arizona. You get old, and the snow and cold are no longer fun.
This post is educational commentary. It is not investment advice. Trading futures and FX involves substantial risk of loss.
Good Trading!
Michael Duane Archer
Related Reading
- Money Management Lessons from Kenny Rogers’ The Gambler
- Time Hash: A Goodman Method of Trading Mini-Lesson
- Why $175 Silver? A Goodman Levels Price Objective Explained
Keep Learning the Goodman Way
If this article was useful, these are the next steps:
- The Method: propagation, intersection and the 3-C Principle, drawn plate by plate.
- The Goodman Library: the books, from Goodman for Grasshoppers to The Goodman 6 & 6.
- The Trader’s Playbook: the Molokai setup in one printed, numbered volume.
- Mentoring: work one-on-one with the authors.