There are certain types of strategies that every trader or money manager needs to have in place in order to be successful: offensive and defensive strategies.

It is the task of every trader to maximize your profits AND minimize your losses.

Unfortunately, most traders are either good at one or the other, but in reality we need both to win.

Two different sets of strategies are required, and they deserve an equal amount of focus and developed skill. In the past, I was always good at maximizing my profits and had developed the right mental and technical skills to implement those strategies; yet my defensive strategies were not fully developed. I had to consciously work at improving that part of my trading arsenal.

Let's now look at examples of offensive and defensive strategies in trading.

Offensive strategies are designed to do one thing; increase your risk exposure. They are powerful because they create the opening for profits to accrue, and let you maximize on existing opportunities.

Examples of these strategies include: 

- Initiating a position when your methodology signals it. 
- Adding incremental risk exposure to a winning position (pyramiding down). 
- Increasing the holding time of a profitable position. 

Defensive strategies are designed to do one thing; decrease your risk exposure. They are crucial because they keep you out of trades with unfavorable risk/reward profiles, minimize losses, and help to protect your accumulated profits.

Examples of these strategies include: 

- Staying out of the markets when the methodology isn't generating any signals. 
- Exiting a losing position when your edge has been negated. 
- Taking some profits off of the table on a winning position. 
- Banking the entire profit in a winning position. 

You might notice, I've not included tightening of stop losses, trailing stops and hedging as defensive strategies, as they can in my opinion actually increase the risk of loss.

Have you start to developed your own defensive and offensive strategies? Both of them are equally important in trading. Once you know when to deploy each of them and mastered both, you will get to feel satisfied with your trading results.

Further Reading: 
Generate Thousands in Cash on your Stocks Before Buying or Selling Them : ~ Samir Elias

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