After working this a bit more I wanted to add another reason for why strategies make money. This applies more to manual trading and is a pretty good characterization in what I do. It is this: being appropriately confidant or skeptical when it pays to be so. Sometimes "events" are priced into the market with a degree of certainty that is unrealistic. For example, there's currently a lot of noise about 4 rate hikes coming this year. Sometimes, the market prices this in with a lot more conviction than the speculation deserves. Especially given the volatility in the emerging markets and political situation in the U.S.