Many people are curious about the reasons behind market fluctuations—for example, "Was the sharp drop in BTC on October 11th caused by Trump's rhetoric, regulatory policies, or a sell-off by large investors?"
This curiosity is perfectly natural, but focusing your trading research on "finding the cause" can easily lead you astray.
First, with all events, you only see price fluctuations first, and only afterward can you see the explanations and causes. When you witness the price fluctuations yourself, the so-called "reasons" are just fabricated stories.
For one thing, you don't have the advantage of prior information.
Second, predicting future events based on past events or information is even more difficult.
Not only is accurately predicting "what will happen in the future" extremely difficult, but even more challenging is predicting "how the market will react to this new event" (for example, the same negative news can sometimes cause the market to plummet, while other times it can actually rise).
So, what should be the correct focus in trading (especially options trading)?
First, focus on the effectiveness of your strategy: which market trend are you trying to capture? Is it a trend acceleration phase, a period of volatility, or a period of extreme sentiment? Different market conditions warrant different options strategies (for example, buying calls/puts in trending markets, straddling in volatile markets, and protective puts in extreme markets).
What you need to consider is: Can this strategy generate long-term profits in the target market? Are its win rate and profit-loss ratio sustainable?
Second, focus on response and management: The market is always full of surprises (such as black swans, sudden policy changes, and liquidity crises).
When extreme situations occur, can your strategy withstand them? Or even capitalize on the volatility? For example, use option buyers to limit maximum losses (the only risk is a zeroed premium), sellers to capture time value (steady profits in volatile markets), and combination strategies (such as iron condor spreads and collars) to lock in risk exposure. True trading experts don't predict the future correctly, but rather design rules in advance to ensure they can handle whatever happens.
The essence of options trading isn't about competing with others to understand the underlying reasons, but rather about using strategies to create asymmetric advantages—being able to follow the market's upward trend, manage risk during declines, and profit from volatility during market fluctuations.
Focusing on whether your strategy is effective and whether you can respond with composure is far more meaningful than dwelling on why the market went up or down today.
