Slipping punches is in my opinion the ideal way to counter punches. You absorb no damage whatsoever from your opponent, and you put yourself in the best position to counter strike with power.
As a general rule of thumb, we look to slip on the outside of straight punches, keeping us aware from the free hand of the opponent. Which ever side we slip to, we will have our hips “cocked” to fire a power punch on that side.
For looping punches like a hook or an overhand right, we use the bob and weave. It starts off like a slip moving away from the punch, followed by ducking underneath and swinging back towards the punch (but still under). This also allows you to get a power punch on the way out.
Furthermore, you could also slip and punch simultaneously, returning the same punch your opponent is throwing at you, which can be very effective too.
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