Read the chapter in question thoroughly. The purpose of annotation is to pick out the most essential parts of the chapter and cite them. Without a proper understanding of what information the chapter contains, you will not know what to annotate.
Create symbols to use when you annotate. For example, use stars to draw attention to a particular word, and use a bubble to draw attention to a certain phrase or sentence.
Place brackets on the page margins at a particularly long but important section of the chapter. In the remaining space of the margins, write a brief but explanatory note about the information contained in the bracketed section.