In his last months, Charlie Goodman was drawing charts, 1-2-3s and 3-C counts in a way Michael Archer had rarely seen. This is the story of Charlie’s final idea, and of Inner Sanctum, the project built to explore it.
Charlie’s Last Days
Charlie died in October of 1984. I had moved back to Colorado the previous June. I tell everyone I went to Hawaii fancy-free and returned with a wife, two children and a dog. It was a chaotic time, needless to say. We had planned to stay with my parents a month or two so Elaine could get the lay of the land (she had lived in Hawaii for 12 years) and see where on the west side of town or in the suburbs she wanted to buy a house and call home.
Unfortunately, it was too much for my parents. Adding to everyone’s misery, our dog, Lucky, and my parents’ dog, Tubby, didn’t exactly see eye to eye. We quickly decided to punt and found a rental with an option to buy in a house I knew would be too small. But it was in a nice west-side neighborhood and ready to move in. Spoiler alert: we didn’t exercise the option to buy ($54,500 in 1984), instead moving to the suburbs. That house recently sold for $790,000! Look what the government has done to our money, Ma!?!
I mention all of this to explain why I did not see Charlie often during that period. Perhaps once a week, if that, I scampered to his house on the south side of town for some charts and discussion. Keep in mind that during the Hawaii years Charlie and I talked almost every day before the markets opened: he in Denver, me in Honolulu. The typical conversation ran about 30 minutes. The long-distance telephone bill was something to see each month! I felt guilty about it and reimbursed the company for those charges.
I should note Charlie seemed fine during those Denver meetings between June and October of 1984. Of course, none of us gets younger, and Charlie was in his mid-60s at the time. Still, it was a shock when Jerry Peters called me in mid-October to inform me Charlie was in the hospital and “it doesn’t look good.”
I went directly to the hospital after Jerry’s call. They had Charlie hooked up to a half-dozen machines, with tubes and hoses everywhere. He was asleep, so I just sat down, tears in my eyes, making a heroic effort not to cry.
Perhaps sensing my presence, he opened his eyes, looked at me, smiled, and said, “Hey, dad!” He turned and went back to sleep. I stayed a few minutes and left, figuring I’d go back in the morning. I cried all the way home. Elaine, my wife, had a difficult time understanding how much he meant to me.
Early the next morning, Jerry called me. You could tell he’d been crying. “Michael, we lost Charlie last night.”
I don’t know if I mentioned this anywhere in 50YearTrader: Charlie was a prince to many young women, mostly single moms. He consulted them and gave them money. When they had a problem, they went to see Charlie. He always made time for them. Many an afternoon we were doing charts at his house when a gal would come by, typically distressed. I would excuse myself to the basement den and play pool while Charlie comforted her. At his funeral in Eads, Colorado, I can attest you never saw so many women, in tears and weeping openly.
Charlie’s Final Idea
On two or three occasions when I visited Charlie in those final months, he was drawing charts, 1-2-3s and intersections, and doing 3-C counts on them. While he annotated charts often, it was unusual to see him drawing them. There were other hieroglyphics I didn’t understand. I am sorry I didn’t pay more attention or ask questions. Mea culpa: I had a lot on my mind! That said, he didn’t seem ready to share much of it with me at that time. I suspect the ideas were still too fresh and delicate in his mind.
What I did extract was this: he hypothesized (undoubtedly while in the bathtub!) that the three Goodman principles could be collapsed into just a single 3-C principle. I remember telling him, “Charlie, it sounds like a mechanical system!” Of course, for the Charlie I knew such things were anathema. We were happy discretionary traders, and the days of mechanical systems were just coming into being. At least everything was still a 1-2-3!
“Well, it could be. It’s possible to make several successive trades, closing the long and simultaneously going short. But as you often say, dad, it is a long way to Tipperary.”
Inner Sanctum: The Beginnings
I forgot about all of this in the rush and chaos of the passing years and decades. In 2013 (my earliest notes are dated January 15, 2013) I began thinking of it again. I have no clue what triggered the memory. I tried to recall everything I could from those brief end-of-life conversations with Charlie. I started tinkering with ideas to use the 3-C exclusively, keeping in mind the other two Goodman principles, Propagation and Intersection.
I eventually came up with something that seemed feasible. I asked my youngest son, Anthony, a whiz at programming, to see if he could make it happen with MQL4. He had never shown ANY interest in the markets (alas, none of my four children did), but this seemed to fascinate him to some degree. He learned MQL4 very quickly and soon informed me there was something in MQL5 that the program, code-named Inner Sanctum (“IS”), needed in order to function. And so we punted to MT5 platforms.
At the time he was in college getting a degree in metallurgical sciences, and the resources he could devote to the project were obviously limited. But, again, it captured his interest and he kept at it.
We went through several versions of IS, continuously refining it. We had a few robust but friendly arguments when I told him he had misinterpreted something in a Goodman principle. “Dad, it is EXACTLY what you wrote in the document you gave me!! Which is it!?”
We seemed to have come very close to something, in any event. We ran multiple promising back-tests using the ME back-testing routine, and both of us got quite excited! The per-trade profits were slim, but the hit percentage was over 60 and the R/R was fairly close to 2:1. I had suggested to him that if it actually worked it would be a nice little income for him, and I would fund his account. Naturally, that had appeal! We got as far as setting everything up on a trade copier with one master and three slave platforms. Spoiler alert: most trade copiers on the market are junk. We wasted a lot of precious time finding a reliable one. If you want to know which one worked best for us, chat me.
To be honest, I really didn’t know what the program was doing, other than as he explained it to me. Was it close to Charlie’s final idea? I think so, but honestly there were too many variables to say with anything approaching certainty. Alas, we continued to get a consistent error, I think something like a stack overflow. The program would run for a while, then stop reading the data and crash. At some point Number Three Son just got too busy with his new job after graduating.
Toward the end of the COVID drama he picked IS up again and happily announced that he had made something of a breakthrough: “I’m pretty sure this is what you and Charlie have in mind.” Then work called and he’s been “slammed” since. He is a senior engineer and travels often.
That is where we are now with Inner Sanctum: nothing has been done for a couple of years.
Inner Sanctum: The Basic Paradigm
Here, simply for the record, I will offer the basics of Inner Sanctum as it stands at this time: our interpretation of what Charlie had in mind. I believe Charlie had the IS idea for a long time, somehow knew he was leaving soon and rushed to get it on paper. He just ran out of time. Perhaps others will decide to toy with the basic theme?
For me, alas, IS almost certainly is going to be on my incomplete wish list, along with Mundo (a synthetic FX pair using T-Sets), The Trend Machine (cellular automata) and Goodman Boxes (GWT for both price and time). Tempus fugit.
To be continued.
Good Trading!
Michael Duane Archer
Related Reading
- Golly, Toto! Discretionary Trading vs Bots and AI
- Goodman FireStarter Technique, Part 1: Short-Term Strategy
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.