As the holiday season winds down and we approach the end of 2024, it’s time for traders to start wrapping up their activities.
How do you effectively close out the trading year to ensure you’re ready to charge ahead when the new year begins?
Here are four straightforward steps:
- Minimize Your Risk Exposure
It’s a good idea to wind down your forex positions. The major currencies are unlikely to see significant moves during the holiday week. A few pips here and there aren’t worth the constant monitoring, especially when you could be spending time with friends or enjoying some leisure by the fire.
If shutting down your long-term trades seems too drastic, at least consider tightening your stop losses to reduce risk.
- Review and Reflect on Your Trading Metrics
Profit at the end of this year doesn’t guarantee a repeat performance next year. To continue succeeding, or to improve, you must look back at your trading journal. This will help you assess whether the strategies you employed were suitable for the market conditions, identify areas for improvement, and spot any psychological barriers affecting your trades.
If you haven’t already, start creating a trading journal from your broker summary reports to compile basic trading stats. Even from this fundamental information, you can derive valuable insights, such as average return-on-risk, longest drawdowns, and your biggest wins and losses.
- Set Your Goals for the Coming Year
With a clearer picture of your strengths and weaknesses, jot down your goals for the upcoming year. Keep them simple and achievable, especially if you’re still learning the ropes. Goals like “no impulse trades,” “identify trending markets before activating trending EAs,” or “focus on high reward-to-risk trades” are not only realistic but also measurable.
It’s essential to prioritize process over profits; while you can’t control market outcomes, you can manage your reactions to minimize losses and maximize gains.
- Enjoy Your Break!
Taking a break is one of the most effective ways to alleviate trading stress. Unless you have a compelling reason to trade in these final days of the year, embrace the typically slow market period to unwind and recharge.
Rest assured, there will be ample opportunities to apply your market knowledge and trading discipline in the coming year.
By following these steps, you’ll be prepared to spring into action when 2025’s trading bell rings!
