Hey traders and investors!
In the Initiative Analysis (IA) concept, which I recently introduced (link in related posts), there’s a key structure called the market block. On the chart, we see the current market block on the daily timeframe — it’s a buyer’s market block.
Inside a buyer’s market block, there are two types of key contextual zones where it’s logical to look for trade entries:
- Dominant buyer initiatives — initiatives where the correction didn’t reach 50% of the initiative’s range. It’s reasonable to look for bullish patterns when the price returns below the correction point in these initiatives.
- Seller initiatives located at the base of the market block or at the base of a trend movement that led to the formation of the market block.
In our case, there is a dominant buyer initiative. The correction low in that initiative is 85072 — a level from which buyers have tried to rebound for the third time, without success.
That’s why the price may likely fall to contextual zones inside the seller initiative. There are 4 possible types of such zones:
- upper and lower boundaries of the seller initiative;
- extreme point (low) within the initiative;
- the seller’s target level that hasn’t yet been reached.
All four levels are marked on the chart.
If you want to understand how this works in practice — keep reading.
To everyone else — I wish you profitable trades!
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What is a Market Block?
Buyer and seller initiatives create chart structures that include ranges, transitions, and trend phases. As one side gains momentum, it breaks the previous extreme — this signals a shift in the market balance.
It’s important that the breakout happens not from simply expanding a range but as part of a structured directional move (trend).
The sequence of initiatives that leads to such a breakout is called a market block or trading segment. A market block ends when the opposite side forms the first counter-initiative. A market block includes all initiatives starting from the maximum correction point after the previous market block up to the first counter-initiative following the breakout.
The start and end of a market block usually coincide with consolidation phases. On lower timeframes, a market block may appear as a single initiative on a higher timeframe.
• If the upper extreme is broken — it’s a buyer’s block.
• If the lower extreme is broken — it’s a seller’s block.
Visual examples:
• Both blocks below start and end with ranges. Both are buyer blocks:
When we look at four buyer market blocks that pushed price toward 109,000, the structure of buyer and seller initiatives clearly shows how the strength of buyers gradually faded:
• First two blocks: seller initiatives only at the base, dominant buyer initiatives where corrections didn’t reach 50%.
• Third block: seller initiatives not only at the base, and more of them.
• Final buyer block: seller initiatives cover 75% of the block’s price range.
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Let’s move from history to the current chart:
If every contextual zone worked perfectly, price would always move up. In reality, such zones only increase the probability of a good entry if supported by confirmation — but they do not guarantee results.
Here’s the latest market block on the hourly chart — a seller’s block:
The initiatives between the last buyer block and the seller block do not form a proper market block, because the breakout above and below happened as a result of sideways expansions, not trend structure:
The current seller block looks structurally similar to the third buyer block:
So the seller isn’t as strong as the buyer was in the first and second blocks — but there’s also no active buyer, since the last correction ended near resistance at 93388.
A new seller block is now forming on the hourly chart. Once a buyer initiative appears, the block will be considered complete. For now, it structurally resembles the fourth buyer block:
Will the buyer initiative in this new seller block take up ~75% of the range — like it did before the 109K reversal? If so, the maximum expected drop could be the lower edge of the rectangle (72800–72700).
This is the power of IA: instead of random candles, you see a structured narrative of buyer and seller actions.
Clarity on the Chart. Smart Trading Decisions
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Try it Yourself
You can test these models on charts of different assets, practice identifying structures — and only then consider using IA as part of your strategy.
Start by:
1. Choosing an asset
2. Marking buyer and seller initiatives
3. Identifying dominant and counter-initiatives
4. Observing how often corrections pause at contextual zones
The more you train your eye, the more clearly you’ll see price logic through the lens of IA.
If you enjoyed this post — like it, share it, and leave a comment with your thoughts or questions.
And if you missed the original post introducing the Initiative Analysis method — check the link in related posts!
I wish you profitable trades!