For your formation to be legal, you need 3 defenders, 1 striker, 1 goalkeeper and 1 or 2 players on each side, left and right. These are the basic rules.

There's also some rules that noone is sure of yet, like needing at least 1 player in the middle row, M row, M(L/C/R), or at least four players in the opponent's half, M row and forward.

If you don't follow these rules, your formation is illegal and you will have only 20% possession.