Goodman White Space: What Charlie Meant by a Clean Setup

For Charlie, the two primary Goodman Setups, the Goldilocks and the 6 & 6 / Molokai, had to be “clean” to qualify as trade candidates. Of course, Charlie being Charlie, he never defined for me what he meant by clean. I had to sort it out for myself and, me being me, I called such qualified setups “sexy.”

Where the Term Came From

Around 2012, Goodman student Ken W., a retired dentist, presumably used to working in tight spaces under difficult conditions, took my “Clean-Sexy” story about setups and came back the next lesson with this: “What Charlie meant was ‘white space’ areas between swing points with no price action, just blank (‘white’) chart background.”

That resonated with me and I have used the term since. Thank you, Ken! Here is the Goodman White Space diagram:

Goodman White Space diagram showing the primary white space areas in a Goldilocks Setup — White Space in a Goldilocks Setup.

The areas bordered by two black swings and a hatched green swing are the primary White Space areas.

The astute Market Environments student will conclude quickly that “thickness,” meaning overlap between successive price bars, is anathema to white space.

Extra for Experts: the black-green-red triangular “secondary” areas might be worth exploring. Get out your high school trigonometry book!

Why White Space Matters

What matters is that Charlie wanted to see a buyer-seller struggle as the setups form, indicating both sides had life. Such a struggle is most apparent in clean, sexy charts with lots of white space. Setups with lots of white space jump right out at you.

Two Real-World Examples

Here are two real-world examples of clean Goodman setups with decent white space:

Goldilocks Setup with generous white space on a MetaTrader 5 chart — A Low In The Saddle Goldilocks with clear white space. Chart courtesy of MetaTrader 5.

The chart above is also an example of a LITS (Low In The Saddle) Goldilocks, where the EP of the Back Matrix FPS is close to the BP of the Front Matrix FPS. It also has a strong risk-reward ratio because the EP of the Back Matrix SPS is itself close to the BP of the Front Matrix FPS.

Second clean Goodman setup with white space on a MetaTrader 5 chart — A second clean setup. Chart courtesy of MetaTrader 5.

Charlie Says

“No single factor or Overlay can make or break a trade candidate. It is in the balance and sum of Overlays by which a trade candidate is decided ‘yeah’ or ‘nay.'”

This post is educational commentary. It is not investment advice. Trading futures and FX involves substantial risk of loss.

Good Trading in 2025!

Michael Duane Archer

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.

Educational onlyThis post is educational material. Nothing in it is a trade idea, signal or recommendation. Trading foreign exchange, futures and equities involves substantial risk of loss and is not suitable for every investor. Past performance is not indicative of future results.