Defense Is Better Than Attack In Trading

ituglobal

Master Trader
Apr 17, 2013
515
31
69
“Defensive strategic trading clearly is more successful in the long run than you might think! There will always be people who briefly achieve huge returns using daring maneuvers, but in the long term the strategist with an approach based on sound statistics will be successful…”

When an advancing army anticipates attack, they tend to prepare themselves so that they can fend off the attack successfully. When a state of war seems hopeless, an intelligent and experienced general would tell his army to wait and let the enemy attack first, while they prepare for the attack. Defense is better than attack. In football, when a team is too desperate to score goals at all costs, their defense may be unknowingly put in disarray and this may enable the opposing team to utilize the sudden weakness and score a goal, thereby frustrating the team’s effort.

The same is true of trading, because the most important goal is not to lose our money. When we achieve the goal, there would be times when profits would come normally. We not need to bury our heads in the sand, ignoring reality. We would need to come to grips with the fact that we may not survive the markets permanently until we learn how to deal with the uncertainty of the markets. The way risk is handled clearly differentiates between a market veteran and a novice. A market veteran does not react negatively during a loss; whereas a novice does. A veteran waits for another trade after some negativity – she/he does not overreact when there is loss.

If we feel that all our trades will be profitable, we might later be surprised that we are not right. The market does not ask for our approval before it turns against us. The fly does not ask for our permission before it perches on us. Negativity happens in all ventures. The ultimate action we can take is to tame the risk and not gamble our funds away – as many traders do.

The quote above is from Rene Wolfram. The quote below is also from him, (based on his interview in TRADERS’, September 2014). The quote below ends this article:

“Most traders think topics like mental coaching or risk management are boring, but that’s exactly where the problem is: These things are the most important ones in trading. And there’s another problem: Many traders know trading approaches that work but are simply incapable of implementing them on a regular basis.”
 
  • 👍
Reactions: Glastonburyk

georgialio01

Newbie
Oct 18, 2015
4
0
1
56
yeah absolutely true defense is better one option then attacking but at certain point attacking strategy needs to get job done
 

radex78

Banned
Nov 15, 2015
676
17
54
45
Yes I think defense with strict risk management and money management is important and this can more long run if compared with agressive trading, with strict risk management as trader will more carefully before they open any entry point hence they wil always calmly to making proper plan trading.
 

olivine

Trader
May 21, 2015
140
0
7
very well said defense is good in every situation and attack is effective in some when we had good experience and accurate analysis of forex market. Defense saves traders from big risks they well plan and manage their trades before they open any trade in forex market.
 

radex78

Banned
Nov 15, 2015
676
17
54
45
Very advisable for beginner to have mindset to saving than boosting, it's mean they must trade with strict risk management and money management, don't chasing profit but minimize the risk as can possible, because to increasing money in forex is not easy and required high patience also.
 

Saska

Trader
Jan 21, 2016
23
0
7
24
Very advisable for beginner to have mindset to saving than boosting, it's mean they must trade with strict risk management and money management, don't chasing profit but minimize the risk as can possible, because to increasing money in forex is not easy and required high patience also.
Defense is a sure way to lose the fight). On the market people come for the money, then you need to take risks. If a person has come to reduce the risks, the reliability does not come, zero risk.
 

radex78

Banned
Nov 15, 2015
676
17
54
45
As trader although they felt confidence with their analysis, but they should trade with risk management to maintain account if the market eventually move not like as their favour, we should remember if we can't control the market but we should following the trend market, and here required proper plan trading with included use risk management.
 

GazFx

Banned
Nov 13, 2012
478
73
74
62
Melbourne, Australia
www.youtube.com
“Most traders think topics like mental coaching or risk management are boring, but that’s exactly where the problem is: These things are the most important ones in trading. And there’s another problem: Many traders know trading approaches that work but are simply incapable of implementing them on a regular basis.”

So very true! But how does the newcomer come to grips with this without first getting his/her hands dirty? You can trade a demo account, but that's like rehearsing a speech...totally different than actually giving the speech!
 

radex78

Banned
Nov 15, 2015
676
17
54
45
So very true! But how does the newcomer come to grips with this without first getting his/her hands dirty? You can trade a demo account, but that's like rehearsing a speech...totally different than actually giving the speech!
I think if new comer which might still blind at all, they need practice with demo account, maybe this for certain trader they don't like using demo account because only waste time, but still useful to backtesting system and strategy
 

GazFx

Banned
Nov 13, 2012
478
73
74
62
Melbourne, Australia
www.youtube.com
Yes, I think a demo account is vital for the newcomer to test skills, strategy, and become comfortable with the trading environment. Also essential for testing a new strategy, so certainly not a waste of time. But if we are talking about managing emotional reactions to the psychology of trading, then only live trading will do.
 

Farver58

Newbie
Jul 3, 2016
4
0
1
65
Manualy Take profits when ITM before it turns, move SL ITM area as needed. Manualy Take a small loss when OTM area, and change direction to gain profits when wrong at first. Lose less and gain more. Long runs with a trailing Stop. Short runs with short stops. This is how I visualize risk management basics.
 

ArslanKemal

Trader
Aug 3, 2016
31
1
12
33
hm.. very interesting notice. I agree but in some cases attack can be really effective, the main factor is to be confident in your knowledge and your actions.
 

Ary Barroso

Active Trader
Jul 9, 2017
908
71
39
35
Basically, good skilled Forex traders can understand that when they should attack the market and when they have to hold on! By the way, for me defense means my money management knowledge; it helps me a lot to recover my losses in my trading.
 

Aaronpp

Newbie
Aug 6, 2019
23
0
1
34
It’s completely true, in trading at Forex, many people have this mistaken idea that to make a profit you must necessarily make very large movements of money, but you don’t, the main thing in the market is to try to keep your capital intact, as this is done you make profits and that’s a way that doesn’t take much into account but it works, In the meantime very risky transactions generate a lot of money but capital losses can be potential, so you should have as your main rule to keep your capital at all costs.
 

Glastonburyk

Trader
Feb 3, 2019
50
17
24
38
“Defensive strategic trading clearly is more successful in the long run than you might think! There will always be people who briefly achieve huge returns using daring maneuvers, but in the long term the strategist with an approach based on sound statistics will be successful…”

When an advancing army anticipates attack, they tend to prepare themselves so that they can fend off the attack successfully. When a state of war seems hopeless, an intelligent and experienced general would tell his army to wait and let the enemy attack first, while they prepare for the attack. Defense is better than attack. In football, when a team is too desperate to score goals at all costs, their defense may be unknowingly put in disarray and this may enable the opposing team to utilize the sudden weakness and score a goal, thereby frustrating the team’s effort.

The same is true of trading, because the most important goal is not to lose our money. When we achieve the goal, there would be times when profits would come normally. We not need to bury our heads in the sand, ignoring reality. We would need to come to grips with the fact that we may not survive the markets permanently until we learn how to deal with the uncertainty of the markets. The way risk is handled clearly differentiates between a market veteran and a novice. A market veteran does not react negatively during a loss; whereas a novice does. A veteran waits for another trade after some negativity – she/he does not overreact when there is loss.

If we feel that all our trades will be profitable, we might later be surprised that we are not right. The market does not ask for our approval before it turns against us. The fly does not ask for our permission before it perches on us. Negativity happens in all ventures. The ultimate action we can take is to tame the risk and not gamble our funds away – as many traders do.

The quote above is from Rene Wolfram. The quote below is also from him, (based on his interview in TRADERS’, September 2014). The quote below ends this article:

“Most traders think topics like mental coaching or risk management are boring, but that’s exactly where the problem is: These things are the most important ones in trading. And there’s another problem: Many traders know trading approaches that work but are simply incapable of implementing them on a regular basis.”
I like having two accounts, high risk and low, if the high risk account does well I lessen the risk or add the profits to my main account