Sumary of The Forces of Supply and Demand:
- As prices dance around on charts, traders are often looking for reasons to explain price movements however, the underlying source of price movement boils down to the relationship between supply and demand.
- Generally, positive news means increased demand and lessened supply – equating to higher prices.
- Negative news usually spells lower demand and increased supply.
- This article will outline the following foundational aspects of supply and demand:What is supply and demand?
- Supply and demand zones Supply and demand in the forex marketHow does supply and demand work?
- Supply and demand is the relationship between buyers and sellers that is used as a measure for price determination in financial markets.
- The forces of supply and demand interact to affect an equilibrium price between buyers and sellers whereby the quantity of demand equals the quantity of supply.
- ‘Supply’ is purely the amount available, while ‘demand’ is the amount that is desired.