Bitcoin Down: This is Why We Have Downside Exit Targets

So that bounce didn't last long. Bitcoin produced my favorite entry pattern yesterday, the bullish u-turn as I call it.

This is why you use a stop loss and favorable risk reward ratios!

I constantly preach knowing both the upside and down side price targets on any investment you don't plan to hold forever.

The bottom line is whether you are an investor, swing trader or day trader you will be wrong. In fact, you will be wrong on investments and trades more often they you would like to believe.

Thus making sure you have atleast a 2 to 1 profit to loss ratio every time you enter a position.

This atleast lets you be wrong half the time without losing money. The higher this raito the better - 2 to 1 is the bare minimum in my opinion.

I just took a loss and was more than happy too

I added to my core BTC position a little over 24 hours ago when I got the bullish u-turn signal on the daily chart. The additional BTC was for a trade.

My upside target was 10K and my downside loss was 8,960. I was getting a 2.5 to 1 risk-reward on it.

The pattern did not work this time, bitcoin has sold off again and I got stopped out and took the loss and have no issue with it as it's all within the parameters of overall profitability.