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a recording with bad dynamic balance seems like either a bad performance, a bad recording,
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There are lots of guitars with bad dynamic balance and oddly resonant notes.
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or just a piece with both very quiet and very loud parts. In the latter case, a bit of volume automation would be what I'd go for.
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I am no expert in the fine nuances here. It seems like automation vs compression is sort of an odd discussion when it's just a one track recording. Compression is often applied to one track and automation is often applied to the whole recording (in this case, one track).