Markets move between two states: balance, when buyers and sellers agree and price consolidates sideways, and imbalance, when one side dominates and creates sharp directional moves. Every explosive move is preceded by a period of chop and consolidation.
Most traders think the market is complicated. It really isn't. Price only moves for two reasons. The first one is balance. Buyers and sellers are agreeing on price, so the market does nothing. It consolidates, it sits there, it chops around and goes sideways. Most traders hate this. They skip over it, they call it noise, and they don't want to trade around it. I call it a setup is loading. The second reason is is the market then becomes imbalanced. Buyers and sellers stop agreeing, one side of the market takes over completely, and price moves fast, clean, and with purpose. Here's what nobody tells beginners. Every single imbalance, every sharp move we see on a chart starts with a period of balance first. The chop comes before the explosion every single time. So when we see the market going sideways and we think nothing is happening, We need to look closer. Something is always happening. The market is just deciding which way to go and which side of the market has control.
