How to Aggressive and Defensive in Trading

“In trading, you have to be both defensive and aggressive at the same time. If you are not aggressive you will not make money, and if you are not defensive you will not keep money.”– Ray Dalio

We will discuss on  how to keep the two in balance in aggressive and conservative trading so that you can not only improve your chances of making money in the market, but more importantly, not give that money back to the market.

How to be an Aggressive trader

An aggressive trader is a trader who is willing to buy or sell in anticipation of the trade setup developing or in anticipation of a reversal, without actually waiting for a confirmation.

As you may well know by now, being too aggressive is a quick route to losing money and possibly blowing out your trading account.

If you want to be an aggressive trader please follow the below points

  • Be Choosy in Picking your trades else you will end up over-trading  and you’ll lose money as a result. You need to first obviously know exactly what you’re looking for in the market (what your trading strategy is) and then commit to only trading when that trade set up  is presenting you with a signal.
  • Do not have Hesitation in Trade Execution. I have interacted with lot of trades who failed to pull the trigger once you identify your trading strategy is giving you a signal to trade. Hesitation and fear have no place in a successful trader’s mind.
  • Think in term of Probabilities Reason why traders have problem is they want “THIS” trade to work
  • Expectation — Your ability to create consistent results as a trader is all about what you expect. When you change your expectations to be consistent with the way the market environment exists the fear will go away.

How to be a defensive trader but not too defensive

On the flip side of the coin, you have to be defensive in trading, but not too defensive.

  • Withdrawal some of your profits at the end of the month, if you had any. Doing this will not only make sure you can’t give them back to the market, This way, you will start to view profits as something more real, and this should make you a bit more defensive of them.
  • Realize that you’re going to be the most emotional and thus most likely to give back profits right after a trade. Monitor yourself after a trade, whether it’s a winner or loser. Make sure you don’t jump back into the market on a ‘whim’ and give back the profits you just made. Profits are not easy to make in the market, so protect them. Trader make Error because of expectation, Our Mind think because pattern has emerged its giving us an EDGE on that particular trade and we have no way of knowing it but over a series of trade it will show the effect.
  • During a Losing Streak Always Remember “Its all Right , Eventually I will get a Winner, Do not lose inordinate amount of the money.”

Conclusion

In trading, you have to be aggressive enough to make the most out of a valid trade setup when it arises, but you also need to be defensive enough to not give back the profits you made on winning trades. These two things can often feel as if they are at odds with one another. But by learning an effective trading method like the one I teach in my trading course, combined with proper planning and a healthy dose of patience, discipline and common sense, you will find the elusive ‘middle-ground’ between aggressiveness and defensiveness that will result in long-term trading success.

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