Currency Secrets

What will the currency market bring in 2006? Will the U.S. begin to reduce its trade deficit? Will the Euro begin raising interest rates? Will the Canadian Dollar continue to strengthen against the Greenback? Will China fully float their currency?

These and a myriad of more questions can all be asked, but the only way we could possibly ever answer the question of what 2006 will bring is: it will be different to 2005.

2005 will never be the same again. There will never be a 2005 again.

As to where the AUDUSD will be it can be anyone’s guess. As to what China will do, again it can be anyone’s guess. I don’t have a crystal ball and even if I did do you think I’d be here typing away? I’d have bought a continent by now!

I suppose a more important question about what 2006 will bring is not where the USD, or the CAD, or the JPY will end up, but more about where your account will end up.

What will YOU do in 2006?

And what better way to know what you will do in 2006 than to look at what you did in 2005.

Did you reach expectations? Did you make a profit?

These are the easy questions. Anyone can check their account balance and determine whether or not they made money throughout the year, what’s more difficult to ascertain is whether or not the arrival of those profits were from trading your plan.

Did you trade according to your written plan?

And more importantly now…

What part of your plan can be tweaked to improve your performance?

Again, how will you know the answer to this question unless you document your trades. What made you do the trades you did? Is there a way you can reduce losses and improve profits?

At the end of every year I find the time to sit back and go back through all of my trades throughout the year to see what I did right and what I did wrong.

I then look to correct the mistakes I made (even if I made a profit) and always look at ways of tweaking my system. I write these intended tweaks down and go BACK OVER all the trades AGAIN assuming that the intended tweaks are now in my system. I then ask myself: would these tweaks have made more money on ALL trades? And the reason I ask myself this question is that sometimes tweaking a system can be detrimental to your overall system, therefore you should be EXTRA careful about tweaking your system, and one of the best ways I’ve found is by going again BACK through the trades of the year.

If you don’t bother to check over the mistakes you made last year what will prevent you from making them again this year?

As they say, “History does repeat itself, and if we don’t learn from our mistakes, we are destined to repeat them.”

Make 2006 the best trading year ever.

I wish you all the very best for 2006.