{"id":37,"date":"2025-06-19T15:53:55","date_gmt":"2025-06-19T15:53:55","guid":{"rendered":"https:\/\/50yeartrader.com\/blog\/?p=37"},"modified":"2026-09-30T21:26:27","modified_gmt":"2026-09-30T21:26:27","slug":"goodman-second-chance-entry","status":"publish","type":"post","link":"https:\/\/50yeartrader.com\/blog\/goodman-second-chance-entry\/","title":{"rendered":"Second Chance Entry in Goodman Wave Theory (Don’t Panic)"},"content":{"rendered":"\n

Missed the first entry into a Goodman Setup? Don’t panic. Charlie Goodman often spoke of a Second Chance<\/strong> to get into a Setup trade, and this post explains how it works, how long it lasts, and when it is too late.<\/p>\n\n\n\n

A Note on Second Chances<\/h2>\n\n\n\n

The United States was for a long time the land of the Second Chance. People from around the world came here for one. Americans have always been good at forgiveness and at giving others a second chance if they messed up. Alas, those days seem over, at least for now. What comes after the apogee of the Second Gilded Age is anyone’s guess. The confluence of rapid social upheaval, financial insolvency, technology (especially AI) and climate change is surely too much for humans at this stage in their evolution. It is not difficult to imagine a societal supernova of some sort\u2026 perhaps a multi-generation mini Dark Ages to give the human race time to think things over and try again with a different paradigm. Perhaps an all-out nuclear war is in the cards? The only creatures left will be those trolling the bottom of the oceans. A few million years to re-evolve is no big deal in terms of the age of the universe.<\/p>\n\n\n\n

What Is the Second Chance?<\/h2>\n\n\n\n

Charlie often talked about a second chance to get into a Setup trade. Several readers have asked for more detail and examples.<\/p>\n\n\n\n

Charlie said that if you didn’t panic from missing the first opportunity to get into a market, there was often a second chance to enter at close to the initial risk-reward ratio. Percentages? I really don’t know, but in my experience you will get a second chance close to half the time. But the good ones come quickly, and then: no chance!<\/p>\n\n\n\n

If you trade 5-minute bars, even a quick potty-break may leave you with your pants down, marketwise! See my early post, “Don’t Count Your Chickens!”<\/p>\n\n\n\n

Specifically, the Second Chance (SC) refers to a quick pull-back from a Dagger<\/strong> entry. The SC is usually one-third to one-half of the length of the Dagger. You can wait for more at your own risk!<\/p>\n\n\n\n

Second Chance Examples in Goldilocks and Molokai Setups<\/h2>\n\n\n\n

Here are some Second Chance entries in Goldilocks and Molokai Setups:<\/p>\n\n\n\n

\"Chart
Green Arrow = Second Chance. Red Arrow = Too Late! Even though it would have been acceptable, the risk-reward ratio was out of bounds for Goodman traders.<\/figcaption><\/figure>\n\n\n\n
\"Small
Lots of SCs on this little Goldilocks.<\/figcaption><\/figure>\n\n\n\n

Danger, Will Robinson!<\/strong> The SC should occur soon after the Dagger. One or two bars is best. Again: “A Setup is setup to go!”<\/p>\n\n\n\n

That said, there is an ongoing debate among Goodman traders as to how long after a Dagger entry a trader should stay in before bailing if the Setup doesn’t work right away. I am of the Old School: sit on your hands and let your S\/L stand. Others feel that if the Setup has not propagated after five or six bars, get out! It is certainly a subject worth more study.<\/p>\n\n\n\n

\"Chart
A very small SC here. As my bookie used to say, “You snooze, you lose!”<\/figcaption><\/figure>\n\n\n\n
\"Chart
Again: the Red Arrow marks the entry, and the Black Arrow a brief Second Chance.<\/figcaption><\/figure>\n\n\n\n

When It Is NOT a Second Chance<\/h2>\n\n\n\n

This is NOT a SC. The market has gone too far and the risk-reward ratio is now out of bounds. Lick your wounds and move on! Also, once a market propagates there are no SCs, although a re-propagation into a large Setup is possible.<\/p>\n\n\n\n

\"Chart
An example where the market has gone too far: not a Second Chance.<\/figcaption><\/figure>\n\n\n\n

Charlie said, “I’d rather miss a good trade than make a bad trade.” This is part of the Belgian Dentist trading philosophy. No matter how good the Setup, if the risk-reward is out of bounds: “Sit on your hands, dad; sit on your hands!”<\/p>\n\n\n\n

TIP:<\/strong> You may want to look at the next lower time-frame for Second Chances.<\/p>

TIP:<\/strong> Every Goodman student knows that all Setups must be evaluated for risk-reward, no matter how good they look! This is the “Two Ledger Rule.”<\/p><\/blockquote>\n\n\n\n

Good Trading!<\/p>\n\n\n\n

Michael Duane Archer<\/p>\n\n\n\n

Related Reading<\/h2>\n\n\n\n