I encountered this "defensive trading strategy" term from a post in one of the social media platform. I tried searching for it in the web but haven't seen anything.
I am planning to add this to my overall trading strategy.
If I will elaborate on it based on my own understanding, it means a strategy that will minimize your losses in case of a downtrend or settling a profit right away even there's a possibility of going up in case of an uptrend.
In your 2 months of trading, I'm sure you already hear the word stop-loss. Now applying it to yourself, you should plan a certain strategy just in case your holdings are now decreasing the value; will you sell it or just continue to accumulate.
Determining what price will be your stop-loss is basically can only be answered by you. Just continue to do trades and you will be used on it.
We really have to minimize the losses that we experience when the market suddenly drops, because trading really has to be able to make quick
and right decisions. And by implementing stop-losses in trading, this helps us as traders so as not to experience losses that are not too big.
Stop-loss, in my opinion, can be called a defensive strategy, and we can enter the market again at a lower price when we use stop-loss. I usually
activate stop-loss when the price drops 10%, but that doesn't mean everyone has to be the same as me on stop-loss pricing. Please determine
the price of our respective stop-loss, according to our respective calculations.