Chasing the market is spotting that, say, lots of books have recently been published featuring unreliable narrators and deciding to write a book featuring an unreliable narrator.
What's wrong with that, you might think.
Well, several reasons. First, and perhaps most importantly, is the speed of publishing. It usually takes at least a year, and sometimes as long as two years, from a publisher buying a manuscript to seeing it on the shelves. So why you're seeing now doing well now was bought at least a year ago. It doesn't mean that publishers aren't buying unreliable narrator books right now, because the market might not yet be saturated, but it will have moved on a bit.
Ah, you might think. But I'm going to publish it myself, and skip the time delay of conventional publishing. Which is great and, if you can write quickly, you'll might hit the market at the right moment.
BUT...it's one thing seeing a trend and deciding to capitalise on it, it's quite another doing it. Writing a book is hard enough, you have to have an inner certainty that what you're doing is the only thing you can be doing. So if you deep down really want to write a book featuring an unreliable narrator then now may be your moment. But if what you really want to write is, say, about wild ponies on the savannah then that's what you should be writing.
So don't chase the market. The lack of a deep down drive to write will make a book hard to write, and - if you manage to finish - hard to find a readership because readers can tell if a book is written without that inner passion.
Being aware of the market is something else.
That means spotting that unreliable narrators are currently in, and thinking about going back to the manuscript you wrote some time ago featuring an unreliable narrator. Perhaps the time delay will give you enough distance to revise it.
Being aware of the market also means being aware of wider trends. Some years ago I advised a family friend that their novel would not succeed because no one would want to read about a main character going about his work as a specialist in intestinal worms in dogs. It may be an important job, it may be even an essential job but I'd give the same advice now (and forever, I suspect). It's just not the sort of job a hero should do.
Other trends have shifted - length, for example. Ten years ago and no one was interested in novella-length fiction. That's changed. Overall, books generally are shorter - if I had a 120,000 word novel, I'd definitely start sharpening my axe with a view to getting it down to around 90,000 words. And I can remember about fifteen years ago being told that erotica didn't sell.
Each genre will have trends, and you should be aware of the trends in your genre. If, for example, you observed that crime fiction seems to be getting less violent perhaps it would be a good idea to rein back the the violence in your WIP (perhaps I should stop sharpening that axe...).
So pay attention to the market, be aware of the trends, but never chase it and always write from the heart.