One of the powerful dynamics found by profiling the auction is to see it developing in real time. Below is an example of an auction that is opening in “balance” and continuing to balance early into the day. Markets go from balance to imbalance and balance again. Rinse and repeat. Now, while you don’t often know which direction an auction will proceed after a period of balance, you do know that it will move in a direction out of balance. This is a move you can go with.
Think of this like an auction that has paused and is digesting where it wants to explore price next. Notice what happens….balancing……then….boom!
Good trade location entry is not found while you are in balance. If you can be patient, the good location is found for entry when exiting balance. On the other side, you have time to exit trades when they go from imbalance to balance.
Balance is like the calm before the storm.
So, a question to always ask…..is the market in balance? Is it in imbalance? Is it balancing?