Initiative vs passive

Two kinds of participant

• Initiative (aggressive) traders use market orders and cross the spread. They're in a hurry and pay for it.
• Passive traders rest limit orders and wait to be filled. They provide liquidity and often get a better price.

Footprints count aggression. Passive activity shows up indirectly — in how much aggression a level can absorb without moving.

Patterns to recognise

• Initiative with follow-through — heavy buying aggression and price moves up and holds: buyers are in control at that moment.
• Absorption — heavy aggression into a level, price doesn't move: a passive participant is taking the other side.
• Exhaustion — aggression dries up at an extreme; the move runs out of new participants.

Trading implication

Always ask what price did in response to the aggression. Aggression plus movement and aggression without movement lead to opposite conclusions.