I suppose what I do (selling otm puts), would be classified as trading direction. But I prefer to think of it as "trading ranges".... without the "restrictions and/or potential consequences", of trading a strangle, straddle, or spread,.... if those ranges are breached. Yes, I certainly benefit if the stock rises, as a rise increases my "probability" of success, and/or shortens the trade as I can close the stock earlier for a profit. Yes, my downside risk is not predetermined. But I don't enter a trade assuming the stock will rise. I enter assuming the stock will not drop below a certain price. Only if it does, do I then become a directional trader. Until that occurs, I consider myself an open ended and unrestricted "range trader".... primarily taking advantage of theta. And to a lesser degree, "IV and direction", if/when those occurs. But they are not my primary objectives. I merely take advantage of them if/when they work to my benefit.
direction is easy if it breaks support it could go much lower if it breaks resistence it could go much higher the most important thing in directional trading is the word "if" everything is based on it show me an analyst who doesn't use the word "if" and I will show you an analyst who doesn't know much about directional trading
An ex-colleague of mine always said, "It's all Delta." direction, distribution, vol: it's all really just delta in some form or the other.
Well, unless you are doing some sort of relative value. However, as you rightfully pointed out, it's a much lower return on capital kind of trading.
I think the eternal hope is, you can set it up more like a business instead of just guessing each time. Guessing is fine, and that is where all the money is made, but even if you guess right and get flat, then you have to do it all over again. And that get's old. Very difficult to set this up like a business. The players are very smart and don't give you any breaks. At times, you can get better odds at the craps table in Las Vegas. Hard when you are setting up the business and some directional guy on the other side just made a killing. It will take you five years to get what he got in five minutes. Making 100% won't change my life. Losing 100% will.
I prefer taking deltas. If correct you're typically at an advantage to a delta1 position. I prefer neutral to long gamma when trading neutral (ATM fly with spot hedge). Also w.r.t. the terminal distro (sle comments). You can be wrong on vol and win in the end (path independence).