Whether you use an existing software program or doodle on paper, reviewing the year that's passed is good practice.

Just like that, 2020 is but a memory. Now we are left to pick up the pieces and review how things unraveled. For many, 2020 is a year that we want to forget, but for some traders, it was a great year.

For the year, the Dow managed a respectable 7.3% gain. That is what one could expect if they took their entire portfolio and bought each of the 30 stocks in the Dow Jones Industrial Average. There are some indexes that did even better, like the S&P 500, and some that did much worse, like the S&P energy sector.

How about your portfolio? Did you manage to beat the benchmark that funds measure themselves against? If so, congratulations! If not, the end of the year is a great time to review your trades for the year to see what went right, and what went wrong.

Did you overtrade? Get knocked out at the bottom? Choose the wrong sectors? Did your trading follow a fundamental or technical approach? Each approach has its fans and detractors, so we won’t get into which is better, because that isn’t the point.

The point is, now is a great time to take a very sober look at your trades from the last year. Look for patterns. Look for ways that consistently worked, and more importantly, look for things that did NOT work.

The results may surprise you! You may find that a sector you spend the majority of your time analyzing isn’t a profitable sector for you. You may learn other things, such as whether you tend to do better in a bull or a bear market.

Some traders thrive in bear markets and endure the long escalator ride up in order to profit on the elevator ride down. Other traders find the brutality of a sharp decline to be off-putting and prefer the more gradual rise in the markets that a bull market usually entails. It’s difficult to know which type of trader you are unless you look at the previous year’s trades and their results.

At a minimum, look at how many trades you did, and what percent were winners vs losers. Next look at what your annual return was, and what your maximum drawdown was. Knowing these figures helps you determine whether you are over-trading, or whether you need to adjust your stops or position sizes.

In addition to the above data, I like to see what my profit ratio is. What is the size of my winners versus my losers? If my losses on average are as big or bigger than my wins, I have a problem with my stops and my target, or the market has been particularly choppy. If your profit ratio is positive, and your win/loss ratio is better than 50/50, you're making money, and can work on refining your strategy to inch the numbers further along.

Some traders take their analysis to a next level by using software such as Trademetria. Although their capable software comes at a cost, it has many features that justify the reasonable fee for those that really like to drill into their previous trades to spot trends that are worth exploiting.

Whether you use existing software or a pen and paper, recording and reviewing your trades over the past year is a great way to spot positive or negative behaviors. And in the business of trading, any edge we can get is an edge worth pursuing.