Balance vs. Imbalance in the Market

Markets alternate between balance and imbalance.

A balanced market often trades within a relatively defined range, with buyers and sellers repeatedly transacting around similar prices.

An imbalanced market may show stronger directional movement as price explores higher or lower levels.

For NQ, recognizing the difference can influence how I approach a setup.

In a range, chasing the middle of the move may offer poor risk-reward conditions.

In a strong directional market, repeatedly fading every new high or low can be dangerous.

The challenge is identifying the environment before choosing the strategy.

A technique that works well in a balanced market may perform poorly during a strong trend.

Context should determine the approach, not the other way around.