📚 Theory of Supply/Demand
When I first learned to trade there were many methodologies on how to do technical analysis. When I reviewed the methods none of them gave me any real insight as to why price was doing what it was. Then I discovered supply/demand and the idea behind it. The idea is that there is buying and selling that take place in the markets and one or the other always becomes more powerful and the more powerful the buying or selling the more price will move.
For instance, if more 🟢 buying than 🔴 selling takes place then price will move 📈 higher, if more 🔴 selling than 🟢 buying then price moves 📉 lower. The 🤔 idea makes sense and it’s based on real market dynamics that we can observe in any other market, like 🏘 real estate for example. The more buyers of homes the more prices go up. The more sellers of homes the more prices drop. This one concept is extremely important to understand.
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