If this is anything like FM (which I'm pretty sure it is)
red arrow - player moves to the spot whenever YOU have the ball.
blue arrow - player moves to the spot whenever your OPPONENT has the ball.

ex.
4312 counter formation with red arrow on AM would be a bad idea. Your AM would walk up between your strikers and you'd have a big hole in your midfield having not many options to pass the ball from your defense other than lobbing the ball into cluster****ed front line.

On the other hand, 433 longball counter with red arrow on offensive wings would be great vs 3 men defense. You have your two wingers running into empty spaces every time you have the ball.