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Goodman’s swing count system was developed by M. Duane Archer based upon the trading principles of Charls Goodman, one of the most successful traders ever. The trading principles of Goodman were simple but were powerful enough to earn him huge amounts of profits. He was a very conservative trader who does only one or two trades per month; the trades which he figure out has highest chance of profitability and lowest chance of loss. In short Goodman’s believe was that avoiding a losing trade is better than looking for a winning trade.

Goodman employed the 50% retracing rule to facilitate his trades and for getting most out of the market. The rule states that after a reasonable upward movement, if the market moves back the equilibrium should be the 50% range of the initial upward movement. And the length of resurgence of market will be roughly equal to the initial upward movement length.

Although sound simple, Goodman’s swing count system is not that easy to follow. Trades must maintain high vigilance and surveillance power, but also have to limit their temptations. The model is not so suited for day traders and other frequent trades, and also not for long-term investors. Goodman’s swing count system is less effective in volatile markets, and that is the reason why now only some Forex traders follow this system.

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