I never understood the purpose of diminished chords.
[A diminished chord that appears naturally within a major scale is that which starts in the 7th position of the scale. The chord is completed with two minor-3rd intervals on top (an interval which is 3-half steps up the scale). In C Major, this would be a chord with the notes B – D – F. To contrast this with major and minor chords, B minor == B – D – F# : B major == B – D# – F#.]
Major and minor, these are easy enough. You can play them together, and they sound good. There’s heaps of combinations. But a diminished chord, … ugh. Well, I have just blocked it out as a possible option whenever I’ve been playing.
But! But now I understand. When practising arpeggios up and down through a key (eg. F#, G#m, A#m, B, C#, D#m, Fdim … F#) I found that, yes, there is a musical place for diminished chords. In context, moving slowly and musically through various note-patterns, and (importantly) resolving from the diminished to the home chord, I had my aha moment. It actually sounded nice!
The strange and untenable has its place in a diverse environment where there is movement, (melodic) distinction and resolution.
Enjoy the tension… just keep it moving!