Why is having a good idea of the market's direction not enough to make money?

[barbara44]

Because people who thought they know market's direction doesn't actually know the market direction.
From your example someone might know the market direction but getting liquidated along the way because of squeeze, and so on.

That means he doesn't know market direction on the lower timeframe and don't actually have any idea.
In fact, I think people who said they know market's direction at certain timeframe are bs. It's game of probability after all.

These people must be those that brags on the social media. They are only good at it but they lack on knowledge or analysis. Meanwhile, those people who genuinely have those positive traits are only quite and are reaping the benefits of their hard work and dedication. Being humble or quite may help them as well for their strategy to remain working.

There are still times that even them the experienced one can also make a mistake because after all, none controls the market. In terms of trade, they can also lose but it is a different story anymore if they are dealing with higher risks trades. Those trades are so sensitive even on a small market movements, and that, losing can not be prevented anymore because auto liquidation can now take place.

[FanEagle]

If learning from the past mistakes alone will guarantee profit for traders by now losses will be reduced but after getting knowledge and experience losses the losses keeps occuring because nobody can avoid mistakes totally in trading due to the uncertainty in the market. The best thing after gaining knowledge is to trade with carefulness and don't bring emotions to trading otherwise fear and panic will also make you to experience losses.

Learning from mistakes definitely decreases your chances of losing money because at least you don't lose money to those same mistakes again. But if you keep making new mistakes every time, that's a bigger problem with no foreseeable future. If we were to learn everything in life just by experiencing it firsthand, it would take decades to even get the basics right. Certain things are self-understood and important; we must avoid making avoidable mistakes because they are obvious.

Some things indeed, you only learn after making mistakes and that's fine. Another underrated part of trading, from what I've seen is the use of indicators. For some reason people don't use indicators but they are very helpful if used correctly.

[Dr.Bitcoin_Strange]

You are right @OP, all of this four factors are very important to successful traders, someone can not be consistently profitable if they lack any of those factors. Psychology of trading is where you learn how not to be emotional in some situations, how to execute your decision without hesitation when the time comes, I will give an example using myself, last week I was trading, so I saw an opportunity for short position and I decided to go full margin because I know fully well that the trade will work out and I was targeting a $20 return on that trade, price went to where I already saw the $20 profit I said I will take but I refuse to close the trade because I had more confident that the price will keep falling. Long story cut short, I went from being in +$20 profit to -$32 lose and that was when I closed the trade. I blamed myself at the end. As someone who is not psychological mature in trading, you will battle with being profitable.

[Jegileman]

Giving equal percentage to be considered by all the factors of trading you’ve mentioned is not the way it should be. Those factors affects traders differently, so they can’t be putting into the same level when it comes to trading and being standing an edge to be profitable as a trader. Psychology haven been observed by most traders, they happen to be one of the factors that really needs a lot of attention and even with your knowledge of the market direction and good technical analysis, you’ll still find it hard to fight your psychology and be on the right side of the market always.

[Wiwo]

You should first have your conclusions on the fact that the cryptocurrency market is unpredictable, so regardless of your wealth of knowledge of the market, you cannot be accurate about it, this is why traders need to have these things in place.

1: adequate capital, don't jump into trading when you don't have enough money.

2: portfolio management approach.

3: discipline and patience to wait for a long period of time.

[Asuspawer09]

It wasn't a bad thing to have a good idea of it, but there was just more to it. There are a lot of factors that are going to affect the market, and there are a lot of things that you need to learn and consider before even starting to invest and make a profit in it. Anyone could easily throw money into it, but if you don't have the right knowledge about it there is a huge possibility that you will lose all of your investment easily. Cryptocurrency was a very risky investment compared to other assets. Putting a huge amount of money without even knowledge and experience was surely not a good idea.

I learned a lot of things through my years of investment. In order to make such a real profit, I guess investors just forget that an investment is supposed to be boring and not just some easy money thing; people think that it is just a quick money investment. Put it on crypto in just a few days, and your money is going to multiply easily. They forget that investment is supposed to be boring, long-term, investing in something that actually has a long-term purpose, not just investing in hype. I realize this the hard way, and that is how you are going to have real gain, also understanding the technology like wallet, blockchain, security is a huge thing, a lot of newbies are getting hacked and scammed easily because they started on hype, not on doing their own research.

[LogitechMouse]

It's not enough for me, being right about the market's direction is not always enough, because you still gonna need risk management and emotions, where this is one of the many things that is difficult to practice and master if you are a trader, especially if you are just starting.
Succesfuull trading needs desicipline at all and especially how you protect your capital for long term.

I've been experimenting for months already with regards to the strategy that I want to use, and I tried to use trend-following indicators with price action as well, and I would say that I'm profitable using it, but not as much.

Speaking of market direction, if knowing what the direction will be is enough for a trader to make money, there could've been more successful traders out there right now than what the actual number is. In short, there's more than that. Like what you said, you need risk management, emotions, the right attitudes, and many more. Even you have the right strategy that you can use, even you know the market direction already, psychology might still get you, and you might still end up losing money during the process.

Discipline, self-control, and sticking to your plan and rules. That's 3 of the most important things that a trader must have if they want to be successful in trading.

[michellee]

Traders need to considers the market direction can change anytime so they should manage risk, emotion, and their trading. Their psychology should not affects to the change of the market because that can makes them losing control and panic. But I guess traders need more to success in trading and not just 4 basic things that @OP mention and always aware that they should not over confident with their analysis. Having patient is also needed as the market will not always moves the same as their prediction direction so they should wait for a while and calm down.

[Jatiluhung]

Everything related to theory is actually quite easy to learn. However, the real challenge lies in the discipline required to apply it. For example, in risk management, we usually have a solid plan in place. But if we don’t understand trading psychology and are poor at managing our emotions, we often end up violating the very risk management rules we’ve set for ourselves. The same applies to money management, trading strategies, and the like, they simply won’t succeed if we aren’t skilled at emotional management or at regulating our own emotions in the market. Although trading psychology can be studied, putting it into practice is not easy. It is usually only experience that yields better results in helping someone become more disciplined and better at controlling their emotions in the market.

So, even studying various analyses and devising the best strategies does not guarantee success if a person is not skilled at managing their own emotions in the market. And the emotions that must be controlled most in the market are fear and excessive greed. These two emotions are what often cause traders to fail when they are not kept in check.

[AGogi2003]

It wasn't a bad thing to have a good idea of it, but there was just more to it. There are a lot of factors that are going to affect the market, and there are a lot of things that you need to learn and consider before even starting to invest and make a profit in it. Anyone could easily throw money into it, but if you don't have the right knowledge about it there is a huge possibility that you will lose all of your investment easily. Cryptocurrency was a very risky investment compared to other assets. Putting a huge amount of money without even knowledge and experience was surely not a good idea.

Knowledge is the key to succeed in crypto and if you don’t get knowledge and experience he will always be difficult for you to understand and successful. Bitcoin investment is something that is easy to invest but difficult to handle because many people have start to investment but is hard for them to keep for long term because they don’t have that patience enough to keep for long they just need fast money and that is why knowledge is always number thing to do when starting investment or anything that will bring profit to you business or investment.

Many people always get knowledge about trading but there ideas sometimes always failed because the market is always unpredictable but getting experience can minimize your risk in it. Is just be like someone that don’t have knowledge can lose everything in the market but if you get the experience you will be different from others that don’t no anything and trade.

[Cgrexp]

If learning from the past mistakes alone will guarantee profit for traders by now losses will be reduced but after getting knowledge and experience losses the losses keeps occuring because nobody can avoid mistakes totally in trading due to the uncertainty in the market. The best thing after gaining knowledge is to trade with carefulness and don't bring emotions to trading otherwise fear and panic will also make you to experience losses.

Learning from mistakes definitely decreases your chances of losing money because at least you don't lose money to those same mistakes again. But if you keep making new mistakes every time, that's a bigger problem with no foreseeable future. If we were to learn everything in life just by experiencing it firsthand, it would take decades to even get the basics right. Certain things are self-understood and important; we must avoid making avoidable mistakes because they are obvious.

Some things indeed, you only learn after making mistakes and that's fine. Another underrated part of trading, from what I've seen is the use of indicators. For some reason people don't use indicators but they are very helpful if used correctly.

Learning from mistakes and improving the causes of mistakes increases skills and experience. Which in turn reduces the risk of repeated losses. Learning from our experiences and advice strengthens skills. Many people  make decisions based on the words or experience of many advisors. An advisor can be helpful, but it is not the only solution. Experienced traders never make decisions based on the advice or advice of an advisor, but rather make decisions in accordance with the market structure and their own risk management. Discipline, risk management and a mindset of continuous learning are important for long-term success.

[Faisal2202]

Now let's discuss why traders actually fail in new situations, I have already mentioned this fact that basically in new situations, traders think that having an idea about the direction of the market means that they have gained 100% knowledge about the last trading and with this idea about the market direction, they will definitely make a profit, but in reality, this is not the case. In my opinion, if traders want to be successful, they should give equal importance to these four aspects of trading, that is, if market direction is considered 25%, then Psychology should be considered 25%, similarly, risk management and trade management should be considered equally, only then the chances of traders being successful will increase.

I can't agree more. I know Bitcoin will hit an all time high. People with 5+ years of experience knew this as well, but still they panicked at $60k and sold their coins because they thought they were cutting losses. Our psychology, risk management, trade management rules, and learnings are so mixed with each other that we can't tell the difference. We know cutting losses is important because losing a finger is better than losing an arm.

But we also have to understand that the fear or infection causing the damage is going to wear off in the long run. In the meantime, we just have to bear the pain.

Looking at the picture is one thing and looking at the bigger picture is another. But I won't blame everyone because not all five fingers are equal, and every single one of us has a different mindset, so we do what we think is best for us. Just like in a pandemic, not everyone survives.

[EarnOnVictor]

Just as I mentioned many times in the forum, the reason why many traders are losing is not because they lack good trading strategies, but it's because of over-reliance on strategies.

Instead for traders to be looking for balance, they are looking for a strategy that will deliver 100% winning or close. But it doesn't work like that way, Trading strategy, Management and Psychology must be balanced to achieve that.

[Hamza2424]

Anyone could get any signal, but they won't have enough knowledge to manage their trade. Paid signal groups will share trades with entry and exit prices. They would also mention different take profit levels so we can book profits at different points. This way of giving information is very easy for us to follow, and we can know where the market is going.

But we would panic the moment it goes sideways because we are used to the service and don't want to use our own minds. So we would not have any idea how to manage the trade ourselves. We will be waiting for instructions from the paid groups. They will tell you to close the trade way too late, and by then we will have already lost most of it.

That's why we should have enough caliber in ourselves to trade and manage it properly.

[AmoreJaz]

Just as I mentioned many times in the forum, the reason why many traders are losing is not because they lack good trading strategies, but it's because of over-reliance on strategies.

Instead for traders to be looking for balance, they are looking for a strategy that will deliver 100% winning or close. But it doesn't work like that way, Trading strategy, Management and Psychology must be balanced to achieve that.

Because they are in a hurry to earn large amount of profits as they are expecting that their investments will multiply so many times at a short period of time. Of course, if you are in trading, you want profits, who wouldn't want it right? But as you go thru your journey here, you will understand that there's more than meets the eyes in this market. There are so many angles that you need to be acquainted with before you can truly be confident with your trading skills. Do take note that every coin has their own features and so they have different performance in the market. That is why you need to learn about the project itself so you know where they are heading to. Trading without knowing the behind the scenes is somewhat like trading blindly and so possible losses are imminent on this one.

[MRY]

Just as I mentioned many times in the forum, the reason why many traders are losing is not because they lack good trading strategies, but it's because of over-reliance on strategies.

Instead for traders to be looking for balance, they are looking for a strategy that will deliver 100% winning or close. But it doesn't work like that way, Trading strategy, Management and Psychology must be balanced to achieve that.

Because they are in a hurry to earn large amount of profits as they are expecting that their investments will multiply so many times at a short period of time. Of course, if you are in trading, you want profits, who wouldn't want it right? But as you go thru your journey here, you will understand that there's more than meets the eyes in this market.

Starting with large number of people wish to earn lot of money in the shortest time possible. This attitude, in my view is highly dangerous when perpetuated. Effective entrepreneurs are familiar with the idea that any substantial profits will be achieved after a lengthy patient effort. Trade to read the market the right way so as not to fall in the trap of following trends that in the long run will cost you.

[Japinat]

Knowing the market direction alone won't be sufficient to make you earn from trading, but trading success only happens when you start managing the size of your losses, knowing the perfect entry and exit, and emotional control and its execution. Human emotions are the biggest threat in trading, so if you don't know how to control one's emotions, trading will always be a failure.

This is the reason why trading is never that easy and is never fit for everyone. Not all traders are exceptionally good in controlling their emotions, especially when they are consistently losing, that's the time they will make rush and harmful decisions.

[yhiaali3]

This is why you should not use leverage. In the example you gave, if the trader had not used leverage and had simply held Bitcoin for two months, he would have been able to make a profit without having to take risks or liquidate his position.

Therefore, I personally believe the best way to trade, regardless of the market direction, is to hold Bitcoin for the long term. Yes, you need confidence in Bitcoin and some patience, and that's all there is to it, and you will be winning and safe.

[nara1892]

Because they are in a hurry to earn large amount of profits as they are expecting that their investments will multiply so many times at a short period of time. Of course, if you are in trading, you want profits, who wouldn't want it right? But as you go thru your journey here, you will understand that there's more than meets the eyes in this market.

Starting with large number of people wish to earn lot of money in the shortest time possible. This attitude, in my view is highly dangerous when perpetuated. Effective entrepreneurs are familiar with the idea that any substantial profits will be achieved after a lengthy patient effort. Trade to read the market the right way so as not to fall in the trap of following trends that in the long run will cost you.

That's a dangerous mindset in trading, as it's likely to lead to rash trading, even though patience is the key to success in trading, given that profit scenarios occur when we find a moment that aligns with our strategy. Furthermore, haste and the desire for instant profits can also lead to overtrading and greed. You're right that achieving significant results requires a long and challenging process; I believe every trader should understand this first.

[tygeade]

I would say that is literally all that you need to make money. Just not short term, because short term most people are wrong. If you are 100% right about market direction, you are going to profit, you need nothing else. However, nobody is 100% right about direction, specially in the short term.

Some veterans know the long term direction, and it is not really that complicated and we do make money from it and we need nothing else. I knew that 2025 would be peak, and I knew 2026 would be bear, and I also know the future, 2027 will be stable, 2028 will be a bit recovery and 2029 will be new all time high. Knowing this allows you to make money, but some of us do not have huge capital so we do not profit as much as people think.