What Should Do, Become an Aggressive Trader or Defensive Trader?
Aggressive Trader or Defensive Trader – A prominent hedge fund manager, Ray Dalio, reveals why so many traders are very difficult to get profit consistently. Ray Dalio, who is the owner of the Bridgewater Associates hedge fund company, put his thoughts into the book Hedge Fund Market Wizards.
He said that in trading, you need to be aggressive and defensive at the same time.If you are not aggressive, then you will have difficulty getting profit. Conversely, if you are not defensive, then you will have difficulty maintaining the profits that you have obtained before.
The problem that is often faced by traders is the difficulty to balance between being aggressive in order to be able to benefit and take a defensive attitude in order to be able to maintain the profit that has been obtained before.
In order to overcome the above problems, this time we will provide some tips that you can use to balance aggressive and defensive attitudes when trading. This is very important for you to learn in order to produce consistent profits in the future.
How to be an aggressive trader, but not too excessive
It’s not new if an Aggressive trader is often tempted to trade as much as possible.Trading even though the risk in front of your eyes is greater than you planned before to get a bigger profit.
The above is actually very reasonable you do because the mission in the mind of a trader is to get as much profit as possible in a short and fast time. Many traders think that if the market is good and bright, why not trade.
Such behavior is not easy for you to easily eliminate as a trader. Not only you, an experienced trader often gets stuck thinking that he wants to get rich quickly in a short time.
From the explanation above it can actually be concluded that to be an aggressive trader is actually easy to do. The fact that you have to accept when you are a trader who is too aggressive is over trading, which can sooner or later eliminate the profits that you have gained before. If you don’t stop it quickly, it can eventually cause a margin call .
Here are two simple ways you can do to become an aggressive trader but not too much.
-Do discipline in that you only enter the market based on the trading signals generated by the trading system that you have previously determined. The trading system that we mean here includes trading methods, strategies that you have, and money management. With the trading system, you know what you really are looking for from the existing market movements.
You have to make an agreement and apply it in a discipline that you will only enter the market when the market matches the strategy you have.
-Do not hesitate or be too self-confident when you see a signal to enter the market. A doubtful attitude will make you less aggressive and can miss opportunities to make a profit. On the other hand if you are too confident, then this can cause you to ignore the trading signal when you enter the market.Another thing that often happens when you are too self-confident is to increase the size of the lot because you are too sure of the strategy that you will use in trading.
An overconfidence is often felt by traders who have had successive profits.
How to be a defensive trader, but not excessive
As we explained in the previous discussion, that emotionally, a trader tends to be easier to be an aggressive trader than to be a defensive person. In the mind of an aggressive trader, the trading they do is a way to get more money by entering the market. So what’s the point if a trader only becomes an observer of price movements without often entering the market.
The interesting thing here is an experience shows that when a trader experiences losses that are beyond his expectations, he will tend to be more defensive in forex trading.
Being a defensive trader does not mean being a hesitant and less aggressive trader. Being a defensive trader is intentionally not entering the market even though there is a signal for fear of loss.
From a psychological standpoint, it can be seen that defensive behavior often occurs due to prolonged fear. So that a trader is very rarely to enter the market because they are afraid to get losses, despite his intention to trade. Cases like the above are often found in traders who have a sleeping account or sleeping account.
Actually the defensive word means that emotionally it is not easy to be tempted by price movements that cause traders to enter the market outside the previously agreed signals. This is very different from the attitude of traders who are too defensive, namely the attitude of traders who are afraid of excessive loss, so that it can eliminate the profits that you have got before.
Often too defensive behavior is experienced by traders who have had successive losses when trading.
In order to get around this subject, we recommend that you withdraw or withdraw profits that have been obtained periodically. By doing this, psychologically, you will believe that trading is indeed able to produce well.
By securing some or all of the profits you have ever received, it is hoped that as a trader, you will not be afraid to enter the market. Suata when you can start adding funds and start increasing the size of the trading lot. But this can only be done when you have mastered well how to become a trader who is not too aggressive or not too defensive.
From the explanation above, we can conclude that being a trader should be balanced and not excessive. When you are too aggressive, the result will make your account destroyed slowly. Likewise, if you become a trader who is too defensive, then it can make you difficult to get a better profit than before.
Learn to balance trading patterns, between being an aggressive trader and a defensive trader. In this way, consistent profit is expected to be able to get you.
That is the explanation relating to aggressive traders and defensive traders.Hopefully what we have explained above can be useful for all of you.