A bit of both.
Sometimes I'll watch 'make this sound' tutorials on youtube and copy those. Other times, I'll just try things until something sounds nice. Or I'll start off doing one and end up doing the other by the end
After a while you do learn what things sound like. It's obvious what filters, reverb, distortion etc sound like, once you've heard them once you know what they do, but some things like FM you never 100% know what the effect is going to be.