Defensive Vs Offensive Trader in Forex Market
The nature of the investors is unique as people from all backgrounds invest in Forex. Being the largest financial sector, this industry attracts customers. Many want to get rich by copying the formulas and many prefer to become offensive. They think if they start trading with risks, the market will give them more money. There is a debate in the community which approach is right and the experts even cannot agree upon this matter. In this article, we are going to explain the pensive and the offensive investors’ traits and it is up to the understanding of the community which they prefer.
Remember, there is no universal formula of success in Forex. Every person has an equal chance based on the opportunity but based on the strategies used, they get different results. Read this post and you will know which approach is best to follow.
The defensive investor
At first, we will be discussing the defensive investors in Forex. This is the largest community as the majority prefers to be defensive. There are risks involved in trading which makes the people want to copy the professionals. They believe in walking behind the leader to avoid future problems. They think if they use the methods given by the brokers and stick to the disciplines, there is no chance to lose money. They accept there will be failures but they never want to take chances. They always look for opportunities but will not make the first move. When they get confirmation there is money to be made, they will execute the order. In a way, they try to follow the community and avoid problems.
In this defensive community, you will find they never make money. They follow the right plans but as they are copying the majority’s strategy, the chance of winning is not good for them. Even if they can successfully analyze the chart, the market will never give them money. Forex is known for having a small community of winners. Even with the tools, professionals cannot make money always. From this aspect, many will think is not the best approach. But for many scenarios, maintaining a defensive strategy is the best strategy. They never take risks in the Forex market and only invest when there are confirmed chances.
The offensive community
This is known as the preferred method of professionals because there are risks involved but with analysis. Every decision is taken based on analyzing the chart. Traders may consider them risky but only they know they are on the right track. The professionals, for example, are found to be opening orders in volatility. The market stays away but they have the confidence to invest. This is why the offensive community is not popular. That does not discourage the customers from using this approach because they want to take chances.
The chance of losing money is high in this approach. Don’t think of yourself as Indian Jones but try to maintain a consistent performance. Traders get emotional and want to invest their capital. They forget the risks and his result in losing the money. If you want to become an offensive investor, learn the concepts. You will be required to make decisions and this needs the trader to be confident.
Which approach to follow
There is no answer for this concept because every person has a different perspective. Many will consider being a defensive trader is the best idea. Trading is risky and if we can decrease the chance of losses, this will help to make a profitable career in Forex. However, risks are part of Forex which we need to accept. If we never learn to take risks, there will be no future. From this perspective, offensive is the best approach. We recommend maintaining a balanced approach and improvise depending on the situation. If the market is favorable, get offensive and make a fortune. When the trends are volatile, follow defensive techniques.