Because... The word most often forgotten or mis-used by novice traders.
Every trading decision needs a reason, and to be a good reason. The price of an asset moves for a reason, and it's that reason that you need to consider before placing any trades.
Using technical indicators, as most people do, is not enough reason to enter or exit a trade, there's always some supplementary information missing. That's why 'because' is important.
Say for example you're trading a simple MA cross type system and the faster MA crosses above the slower MA, indicating a buy. Most likely you'll be thinking "I am going to buy now, 'because' the slow MA crossed up". In that case, your 'because' is wrong.
What you should be telling yourself is "the slow MA crossed up 'because' of 'XYZ' happening, therefore I am going to buy". XYZ can be anything, perhaps price is near a support level, or it's near the end of the session and people are taking profits, or it's lunchtime and volativity is low and the MA is just reverting to mean value etc....
The difference is subtle but very important. Indicators alone indicate, they don't make decisions (or shouldn't !). You need to answer the question of why the indication was made in the first place before making your trade.
In the first example you follow your system blindly, the fast MA (red) crosses the slow (blue) from below.
What you should be doing before making a trade is trying to find reasons for the indicator, what made price move up and cause the indication ? what is the 'because' that caused the indicator ? On closer examination, it's 8am (market open) and it's all the overnight orders being filled.
Is that a good time to be trading the market ? I mean it's called 'Amateur Hour' for a reason... Experience shows that any big moves in the first hour almost always result in a correction, so maybe best to stay out for now and let the market settle. In this case, do not follow the buy signal.
Sometimes a bit of context and trying to explain 'because' can prevent you from making stupid mistakes. It's so easy to focus on the indicators alone and forget the bigger picture.