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12/26
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Supply and Demand – the fundamental cause of market movements
It’s easy for beginners to get caught up in exciting new words and to explore the intricacies of Fibonacci Bollinger exponential moving parabolic resistance zones, but perhaps equally important is asking yourself the question: what actually makes the price go up and down?
Taking this view not only gives you a better understanding of the financial system, but it also gives you a better understanding of how all other strategies work.
Supply:
Supply is a term used to describe how much of something there is in existence, how many shares in a particular stock for example, how many government bonds have been issued, or how many units of currency there are in circulation. Supply is always finite. There is a limited number of shares in Apple. You can’t keep buying them infinitely, even if you had the money; eventually there won’t be any more to buy and you will own 100% of it! If you study economics, you’ll be familiar with a supply and demand diagram. In this case, the supply is fixed. It doesn’t matter how high or low the price is, the supply is always the same, as shown by the diagram.
Demand:
Demand represents how much…
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Yulia10 avatar
Yulia10 18 May

good article

AND avatar
AND 19 May

Nice article! Thank you

Fizatata avatar
Fizatata 20 May

Nice, wish you stay winner????

nhamfx16 avatar
nhamfx16 21 May

Good article

AndreK avatar
AndreK 27 May

Good job.

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3/35
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This article is written with the intent to explain basic supply and demand economics and how retail forex traders could benefit from this knowledge. Most retail forex traders are not finance geek and have limited knowledge about market dynamics and how forex market operates. Early Trading YearsI entered the world of forex trading about four years ago and I came from a Management background. When I started trading, I did not have any clue whatsoever about forex market. I used to visit different trading forums and financial news websites in search of a profitable system, where I saw different explanation of price movements. Some financial news website would say that the reason US Dollar fell against Euro because it reached a 50% fibonacci retracement, whereas another forum would state that the price fell because it hit 100 day moving average, other financial experts would argue that prices fell cause it touched a descending trend line and a bunch of experts would say that price fell cause it reached a resistance level. As a novice trader, I used to scratch my head because all these different explanations were too much for me to grasp and it was hard to keep up with it. As a result, I…
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Nicco avatar
Nicco 30 Sep.

I agree with your statements, I have used sometimes this analyse, but the Forex market is a delocalised one and VSA is rigourously suitable for trading stocks.

doubeltop avatar
doubeltop 26 Jan.

Supply and demand zones is an elementary perspective. It's great to see people that truly understand the concept and can use it. It's also nice have indicators now that identify these levels for you on the chart.

pjameslamar avatar

this article and MaximumLots posted an article: 10 Mar Supply and Demand Trading: Choosing the Right Level really compliment each other. Excellent work guys and thanks.

ABCtrader avatar
ABCtrader 21 Dec.

HI all ,thanks Alifari for this Articles ,you know I am attending a course coasting me 2000 u$ to learn how to trade in right way and the most interesting things they teach us now about supply and demands and how to recognize it from the chart and its applied for all markets not only for forex and really it worth to learn how, also I study marketprofile do you believe that those supply and demand are really appears on the chart without any search you can find it in POC.(Point of control).
thanks for the post again.

Gary avatar
Gary 2 July

Great article Alifari! Is the comment on your E/U 30m min chart a typo??? You state Entering at the top of a zone to buy & entering at the bottom of a zone to sell?? Or am I misreading it?

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19/41
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Dear Friends I would like to share a trade with you guys that I took a couple of days back on the EUR/USD pair. Please find attached the chart for your reference. I have marked two zones on the chart namely Zone 1 where I entered long on the trade and Zone 2 where I would like to book profits. This trade was taken purely on a 4hr chart using Metatrader 4 as my platform and no indicators whatsoever just pure supply and demand strategy.Supply Level : It is a level where where most or all buyers are exhausted and prices turn down.Demand Level: It is a level where most or all sellers are exhausted and prices turn up.PS: The most important point is that when the level hit the zone, the zone needs to be a fresh zone and not a one that has already been tested.Factors to consider while going Long(@Demand) or Short(@Supply)Zone 1: You would like to see how price has left the level. The price @ zone 1(Demand) has left the zone with strong rally and big strong GREEN candles. That means there was strong buying pressure at Zone 1.Now idea is if price visits zone 1 for the first time, the zone being fresh you would want to go long at this juncture.Zone 2: You again see how price has left the lev…
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SpecialFX avatar

Unfortunately, you forgot to upload the chart, or there is some technical problem with it. :)

Myprox4x avatar
Myprox4x 20 Aug.

Your title is great ...but where is the picture man??

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20/65
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Supply & Demand:
The
relationship between Supply and Demand determines PRICE of
any market from soybeans, Orange juice ti the currency pairs.
The
four basic laws of supply and demand are:
If
demand increases and supply remains unchanged, then it leads to higher
equilibrium price and quantity.
If
demand decreases and supply remains unchanged, then it leads to lower
equilibrium price and quantity.
If
supply increases and demand remains unchanged, then it leads to lower
equilibrium price and higher quantity.
If
supply decreases and demand remains unchanged, then it leads to higher
price and lower quantity.
Supply:
The
Price at which someone is willing and able to sell something - This can be
interpreted as resistance and a place where speculators like us can Short
the market as Supply will exceed demand and price will fall.
Demand:
The
Price at which someone is willing and able to buy something - This
conversly can be interpreted as support as this is they area where people
intend to buy into the market as the demand exceeds supply and therefore
price moves higher.…
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masterfxtrader avatar

FX - sam seidan can mostly just be googles :) and Does a longer Supply = demand zone mean stronger reaction to reaching that zone afterwards.

AdrianWS avatar
AdrianWS 20 Jan.

Yeah with master fx you can find all his old webinars here - http://www.fxstreet.com/search/contributors/authors/author.aspx?id=5766b88a-1a31-4102-8221-e9bf77216d2f.

AdrianWS avatar
AdrianWS 20 Jan.

normally it does, but it has no rules to specifiy its correlation, therefore it mainly down to whether it lines up with technical or fundamental aswell.

men79 avatar
men79 21 Jan.

interesting....

AdrianWS avatar
AdrianWS 28 Jan.

Thank you everyone for a great month and thanks for the support this month.

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