Promise not to jump all over me as I share my observations and experiences, based on some experimentation.

I believe the Arrows are a "pseudo-positioning" mechanism, which allows for an "invisible" (to opponent) morph of the visible formation. These are NOT to do with mentality (like attacking or defensive) set through team strategy. Example - what may appear to be a 4-1-4-1 formation is actually a 4-3N-2W-1 starting lineup (if the DMC and ML/MR have Red arrows). A counter formation needs to account for the possible positioning of the opposing team. Kinda' explains some of the "Trolls" as well.

As to Red arrows on Strikers - this basically means you want them to play behind the defensive line. Works well especially with Long passing, mixed results with Mixed passing and pretty much a disaster if using Short Passing- especially if the opponent is playing Offside-Trap. You can see this in the stats with the reduced number of shots.

Last but not least - Im convinced that there is some sort of positioning-coding in every player - relating directly to form / game performance. Even in my current team, I have an MR who plays like God-Incarnate if I dont have Arrows on him - Scoring, Tackling, Passing, Crossing - they guy is IN the Zone every game - with form ratings of 7/8 and a few 9s. The minute I load him with a Red Arrow - he appears to disintegrate into someone who just escaped from a looney-farm. Just plays like a moron.