The Monthly Trading Review

A monthly trading review is the zoomed-out companion to the weekly trade review. The weekly session asks whether you followed your rules this week. The monthly one asks what is changing from month to month: in your results, in your discipline, and in the market you trade. It is also the only review where you are allowed to change the written plan or your size, because a month is the first sample big enough to justify it.

This guide gives you the routine in seven steps, plus a scorecard you can copy. It assumes you already keep a trading journal with a planned risk, a setup tag and a "followed the plan" flag on every trade.

Weekly, monthly or quarterly: which review decides what

Each review cadence has a different sample size, so each one is allowed to make different decisions. Mixing them up is how traders end up rewriting their strategy after one bad week.

The quarterly pass is the full sequence in how to analyze your trading performance. The monthly review sits between the two: bigger than a week, still too small for a final verdict on a strategy.

Step 1: Close the books

Start by making the data match reality. Pull your broker's monthly statement and check three numbers against your journal:

• Trade count. Every fill on the statement should be in the journal, including the trades on a second account and the ones you would rather forget.
• Net P&L. The journal total and the statement total should agree to the dollar. A gap usually means a missing trade, a partial fill logged as a full one, or a wrong contract multiplier.
• Fees. Commissions, exchange fees, financing and borrow costs. Fees that live only on the statement make every number in your journal look better than it was.

This takes ten minutes when the journal syncs with the broker and much longer when it is a spreadsheet. Either way, do it before you read a single metric. Every later step trusts these numbers.

Step 2: Fill in the same scorecard every month

The value of a monthly review comes from comparison, and you can only compare months that were measured the same way. Pick a short list of numbers and never change what is on it. Put results in R-multiples, meaning multiples of the amount you planned to risk, so that months traded at different sizes still line up.

The numbers above are a worked example: the results rows come from the simulated record charted in Step 3, and the discipline and cost rows are illustrative. Copy the table into your journal, clear the numbers, and add one column per month. Ten rows is plenty. Read October on its own and it looks like a broken strategy (a 24% win rate, a profit factor under 1). Read it next to the three-month column and the plan-followed row and a different story appears: an ordinary bad month plus a slide in discipline. The "last 3 months" column matters more than the "last month" one, for the reason in the next step.

Step 3: Read the month against its normal range

A single month is a small sample, and small samples swing a lot. The rough 95 percent range around a month's expectancy is 1.96 × the standard deviation of your trade results ÷ the square root of the number of trades. For 40 trades with a standard deviation of 1.5R, that is ±0.46R. A strategy that truly makes +0.2R per trade can post anything from about −0.26R to +0.66R in a given month, with no change in the strategy at all.

In this simulated record, the same strategy made +0.55R per trade in July and lost 0.19R per trade in October. Nothing changed between the two months except luck. Every month's range still contains the true +0.20R, which is why one red month on its own tells you almost nothing about the strategy.

So read the month in three layers:

1. Is this month outside its normal range? If not, treat it as noise until other evidence says otherwise.
2. What do the last three months say? In the chart, August to October averages +0.07R per trade against +0.28R for May to July. That is worth looking into setup by setup, but the range on 130 trades is still about ±0.27R, so it is not yet proof the edge has faded.
3. What does everything since the last strategy change say? All six months together come to +0.17R over 247 trades. Even that is only just enough to tell this edge apart from zero, which matches the sample sizes in how many trades you need to judge a strategy.

The same logic applies to streaks. If the month held a run of losses that felt endless, check it against the expected streak lengths in how long a good strategy can keep losing before you read anything into it.

Step 4: Audit last month's changes

A month holds four or five weekly reviews, and each one should have ended with one specific change. The monthly review is where you find out whether those changes did anything. Make a short list:

• The change, in the words you wrote it ("no entries in the first 15 minutes").
• Did you actually make it? Count the trades that broke it.
• What happened to the trades it affected? Compare them with the same kind of trade before the change.
• The decision: keep it and write it into the plan, drop it, or give it another month.

Most changes will be inconclusive after a few weeks, and that is fine. What you are looking for is the change you quietly stopped following, and the change that clearly helped and still is not in the written plan. Without this audit, weekly changes pile up as vague intentions, and the same problems come back every quarter.

Step 5: Track your discipline across months

Process numbers are where the monthly view earns its keep, because they move slowly and a week hides the trend. Read two rows from the scorecard across the last three to six months.

Plan-followed percentage. If it slides from 92 percent to 85 to 78 over three months, something is wearing you down, whether that is a losing streak, boredom, or trading more hours than you used to. That slide usually shows up in discipline before it shows up in P&L.

The cost of rule breaks. Compare expectancy on trades that followed your trading plan with trades that broke it. A trader whose plan-followed trades make +0.3R and rule-break trades lose 0.5R, on 15 percent of trades, is giving up about 0.12R per trade across the whole month. That is often bigger than any improvement a new setup could add.

Step 6: Note what the market and you were like

Write two or three lines on conditions, so that a later review can explain the numbers instead of guessing.

• The market. Was volatility in your main instruments high or low compared with the months before? Many setups behave differently in a fast, trending month than in a slow, ranging one. A simple measure is the average daily range of the instrument you trade most, against its six-month average.
• You. How many days did you trade, and how many hours a day? Anything outside trading that took your attention, such as travel, a new job or poor sleep?

The point is to explain, not to excuse. If the same setup has lost money in each of the last three high-volatility months, that is a pattern you can act on. Over a year, these notes also make it much easier to read your equity curve dip by dip.

Step 7: Update the plan, the risk and next month's goals

Now make the decisions the monthly review exists for. Keep them few.

Edit the plan. Write the changes that survived Step 4 into your trading plan, and date the new version so later reviews can split results before and after the edit. If you don't have a written plan yet, how to create a trading plan covers what goes in it. Change one thing about the strategy at most per month; change three at once and next month's review cannot tell you which one mattered.

Set the risk for next month. Decide your risk per trade by rule, not by mood. A common pattern is to cut risk after the account falls a set amount from its peak (for example, halve it after a 10R drawdown) and to raise it only after a set number of months of following the plan at the current size. Write the rule down so the decision is made before the month starts, not in the middle of a bad week.

Set process goals, not profit targets. Good monthly goals are things you fully control: follow the plan on at least 90 percent of trades, log every trade on the day it closes, run all four weekly reviews. A dollar target does the opposite of what you want. When you are behind it late in the month, it pushes you to force trades, and when you are close, it tempts you to size up to get over the line.

Putting it together

The monthly trading review is the session where you step back far enough to see trends, but not so far that you are judging the whole strategy. Make the data match the statement, fill in the same scorecard, and read each month against its normal range and the months around it. Then check whether last month's changes held, watch how your discipline is moving, write down what the market was like, and leave with a dated plan, a risk rule and a few process goals. Twelve of these a year give you a record of how you trade that no single month can.