The NZD trade portrays the importance of setting targets. If we hadn't planned our exit, we could have easily given back most of our gains by now. Nailing a big move and making a lot of pips makes us no money if we just sit in the trade and watch it reverse against us.
With the AUD/USD trade, we realized that if the pair hit 1.0340, there was a good chance it would hit 1.0400 quickly after. Sure enough, after better then expected employment numbers last night the Aussie was propelled to 1.0400 by "risk on" sentiment generated by the advancing U.S. stock market. This trade is a great example of why we feel it's necessary to pick a point on the chart where we can say we are "wrong" and no longer want to be in the trade. Clearly defining the risk on every trade is the key to our success.
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