SUPPLY AND DEMAND FOREX AND STOCKS TRADING IN A NUTSHELL by Alfonso Moreno, Set and Forget S.L
The rules laid out in this eBook are based strictly on supply and demand. Nothing else is needed.
- No lagging colorful indicators or studies
- No volume
- No lagging overbought/oversold indicators or studies
- No news events taken into account
- No earnings announcements
The concepts and Videos in this eBook can be applied to any market and timeframe. Forex, Stocks, Commodities, Indexes, Futures, Options, Funds, ETFs, etc.
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WHAT IS SUPPLY AND DEMAND?
The only reason why a price moves in any, and all markets ,is because of the imbalance in supply and demand. The greater the imbalance, the greater the move in price.Why do imbalances occur?
•The currency market ,the financial world in general is dominated and ruled by big investors, institutions, central banks and professional trades .They have the ability and capacity to move and change the markets with thousands of orders-These orders create the so called supply and demand imbalances.•Daily news occurs and affects the world's economies
•Positive news usually increases demand, and reduces supply, leading to higher prices
•Negative news usually decreases demand, and results in an increased supply
•The retailer and small investor ends up becoming the bait, the liquidity the professional traders need to fill many of their orders. They can't sell if there are no buyers interested
Every trader/institution has a different perception of fair price and future value. Supply is simply the amount available, while demand is the amount that is wanted. Supply is the amount available at a particular price, while demand is the amount that is wanted or desired at a specific price.
Trading in the Forex and stock markets can be a complex and challenging endeavor, but at its core, it is all about supply and demand. Understanding these fundamental principles is key to making informed trading decisions and achieving success in the market.
At its simplest level, the concept of supply and demand dictates that when there is more demand for a particular asset, its price will rise. Conversely, when there is more supply of an asset than there is demand for it, the price will fall. This basic principle applies to both Forex and stocks.In Forex trading, currencies are bought and sold based on their exchange rate relative to other currencies. The value of a currency is determined by the level of supply and demand in the market. For example, if there is high demand for the US dollar, its value will increase relative to other currencies.
Similarly, in the stock market, the price of a stock is determined by the forces of supply and demand. If there are more buyers than sellers for a particular stock, the price will rise. Conversely, if there are more sellers than buyers, the price will fall.
Traders can use this knowledge to identify potential trading opportunities based on market trends. By analyzing price charts and identifying areas of support and resistance, traders can determine where supply and demand levels may be shifting, and make trades accordingly.
One popular trading strategy based on supply and demand is known as "price action" trading. This approach focuses on analyzing raw price data to identify trends and patterns, without relying on indicators or other technical analysis tools.
Another important aspect of trading based on supply and demand is understanding the broader economic and geopolitical factors that can affect market conditions. Changes in interest rates, political instability, and other macroeconomic factors can all impact supply and demand levels, and thus influence price movements in the market.
In summary, trading in the Forex and stock markets is all about supply and demand. By understanding these fundamental principles and keeping a close eye on market trends, traders can make informed trading decisions and achieve success in the market.
