Markets can either be trending or rangebound.
We call it balance and imbalance in terms of market profile.

When markets are rangebound it moves from the upper range to lower back to upper range and so on. So it's in balance.

1/n

When markets break the balance it goes in trending mode hence the imbalance.

Trading pattern behaviour and setups change depending on if the market is in balance or imbalance.

Like in case of a balance. Trades are of mean-reverting nature with small sl and quick profits.

2/n

If markets are in imbalance then trades are of Breakout trending with buying pullbacks kind. A wide sl and waiting to book profits.

Most people make mistakes here. When markets are in balance(rangebound) they try to take breakout trades...

3/n

.. and when they understand its in rangebound and they try to do mean-reverting trades, The market moves in imbalance(trending).
then they try to play mean-revesion in trending market and get stopped when they learn its a trending market, Market has already moved to balance.

4/n

So it's important to understand whether markets are in balance or imbalance and change your psychology setups according to it.

5/n

Self-explanatory balance charts of #nifty and #banknifty spot.

My view is we are breaking out of the balance.