As we approached the end of 2007, I wrote a muse discussing how important it is to evaluate your trading and set goals for the following year. Well, we’re now over three months into 2008 and it’s time for your quarterly check up.

Most people will simply review their P&L for a quick grade. However, while a key variable, it's definitely not the true litmus test for whether or not you're improving. With the S&P down over X% for the year, gains have not come without a hard fight so taking a deeper look is a must and asking a few quarterly questions may be the best place to start.

1) What books did you read during 1Q? Consistently soaking in knowledge is a must in this profession and as you grow your desire for outside literature should increase. This past quarter my reading was hit or miss. I read about five trading/investing books and four out of five were garbage. The following was the only one worth mentioning:

The Complete Turtle Trader: This was a great read by Michael Covel and delved into the depths of the Turtle strategy which, in a trending market, correlates with my style quite well. A few years ago an associate had given me The Way of the Turtle by the same author, which sparked my interest on the subject. Both are great reads in my opinion.

2) Where is your understanding of charts? Most people have no direction when it comes to trading, especially when they first begin. Understanding trends, support and resistance areas is a must and helps to solidify a practical trading plan. Were you still throwing darts this quarter or did you plan your trade and trade your plan?

3) Stay Flexible: Did you remain flexible enough to catch the subtle themes that did present themselves this quarter? Did you play the Transportation move? Did you catch any of the solars? As traders grow they realize just how important it is to remain open minded and flexible, in order to play what is in front of them. Are you moving more towards flexibility or becoming more set in your ways?

4) Proper Exits: One of the most important areas, if not the most important area in trading is cutting losses. How did you handle losses this quarter? Are you still lugging around broken inventory hoping for a come back? Did you take a major loss on one particular position over another? Remaining unemotional and being able to cut positions quickly is often the mark of a successful trader. Did you make progress here this quarter?

As we head into the 2nd quarter are you heading closer to your goal of becoming a successful trader, or farther from it? Regardless of where your P&L is, improve on these key areas each quarter and you will be making up great strides in no time.