Look back and plan ahead — how to create an annual trading summary and a plan for participating in markets in the coming year.
As the year comes to a close, it’s important for traders to reflect on their successes and challenges over the past 12 by creating a yearly summary. This process can help traders create a tailored yearly plan, set realistic goals for the coming year, and develop a plan to achieve them. In this article, we’ll take a closer look at the importance of an annual trading summary, and offer some tips on how traders can prepare for the year ahead.
Before reading ahead, I suggest you go and read my previous article: “Journaling 101 — Track, Identify, Improve.” as it speaks about the importance of journaling and how to properly manage a journal.
Now that the year has come to an end, how do you even write such a yearly journal? Well, it should look something like this:
There are many ways to format this kind of journal, I suggest you check Adam's post and see the version he made (which is much more in-depth than mine): https://twitter.com/abetrade/status/1603432293669953537
To begin writing an annual review document, I first thoroughly review my trading journal to identify any areas that need improvement or adjustment. This includes evaluating my strengths and weaknesses, risk management strategies, trading psychology, and overall approach to the market.
Next, I compile a summary of the past year, including notable events, both positive and negative, that can help my trading in the coming year.
Nothing can teach you better than past mistakes, the important part is remembering those past mistakes.
After reviewing the past year, I spend time hypothesizing my expectations & thesis for markets in the coming year. While these may not all come to fruition, it is helpful to have a few scenarios in mind for different market conditions. This allows me to be prepared to react efficiently if necessary.
Next comes the more specific planning part.
- Schedule/routine for a working day
It is essential to plan out your working day and create a schedule or routine to follow. This is true even if you have a full-time job and only trade part-time.
By establishing a routine, you can stay focused and productive throughout the day, especially during your trading hours.
- List of documents/checklists/tools you want to be using every day or before every trading session/trade you take
Create a list of documents, checklists, and tools that you use regularly or need access to before each trading session or trade. This way, you have everything in one place and can easily reference them as needed.
Some ideas for what to include on this list might be links to services you use, sheets and pages you rely on during your workday, trading tools, a trading checklist to review before executing each trade, a risk calculator, and any tax-related documents that need to be completed throughout the year.
- Your trading styles, including markets you want to trade and how you plan on trading them
Go over your trading styles, including the markets you want to trade and how you plan to approach them. Consider the types of trades you want to take and the environments in which you want to focus your trading efforts.
You may also want to consider organizing your accounts according to the exchanges or platforms you use (CEX/DEX/Tradfi etc).
- Strategies and trading setups
Write down all your strategies, edges, and systems that you plan to use during the year. Be sure to go into depth when describing these approaches.
- Risk management and sizing limits
You should outline your plan for managing risk in your trades.
This may include rules for the use of stop-losses, do you even plan on using stop-losses? Will you be diversifying your portfolio with assets that can help reduce your exposure or hedge against other positions? Will you use leverage (lol yes)? If you plan on using leverage, what will be the amount you intend to use and when you plan to use it?
- Yearly, monthly, weekly, and daily targets
What will be your goals for a trading day? Week? Month? For the whole year?
These targets can be financial, such as a certain amount of profit, or they may be related to your trading performance compared to past performance.
- General rules you want to follow and summary for the start of the year
Set specific goals for yourself, both related to trading and personal development. This can include a certain number of gym sessions per week, a running distance target, or personal life goals and principles that you believe are important for a fulfilling life. You may also want to consider writing a letter to yourself, reflecting on the past year and outlining your aspirations for the coming year.
You can add to the journal anything you see fit.
And you’re done!
You now have a powerful tool to use on a daily basis that should contain all your day-to-day needs.
Keep in mind that creating this kind of document is just the first step. The real challenge is using it consistently and sticking to the rules and schedule that you have set for yourself. This requires discipline. If you neglect to follow your own guidelines, the document will be useless. Follow it properly, and you can make significant progress in your trading journey.
Happy New Year, anon!
Delta.
