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This article is to explain and show how a price flow actually works, thorugh some extremely simplified examples, in the attempt to show what is in my opinion the most important concept to understand about financial markets.
Basic concept
Everything starts from accepting a law: if there is an imbalance between supply and demand, as direct consequence a price will change. This is true for any exchangeable stuff, will it be a product, a service, an idea, a commodity and so on. It is an extremely simple concept indeed: more demand equals price up, more supply equals price down. If there is 1 unit of anything, and a lot of people looking to buy it, price will be rising till the point where only 1 will be the buyer.
On the other side if there are 100 units and few buyers, price will be correcting down to attract new customers till the point where all units will be sold.
Supply / demand flows
In a financial marketplace there is a continuous exchange and participants can be either selling or buying the same instrument, or even simultaneously selling and buying. An important difference with any other market, is that there is unlimited quantity of any given instrument, so price…
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loriana avatar
loriana 1 Dec.

Great read

hrustiashka avatar

Good article!

TInna avatar
TInna 2 Dec.

very good!

chuvee avatar
chuvee 2 Dec.

I like the article.


nice work

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This article will continue the "Trading Abc" series, going through a deeper analysis of what is a chart, how price flow is represented on different timeframes and how to consider a timeframe compared to another which are some basilar points I need to focus on before going through the main aspect regarding supply and demand and market behaviors.
If you are interested, here below the list of previous parts:
Everytime we look at a chart, what we see is the graphical representation of the consensus price for a given instrument over a specific period of time. This is done by a software elaborating all data and drawing a line for every new tick, so for example this is how the GBP / USD chart looks like:
In this case the chart represents all ticks coming in 20 minutes from 14:00 to 14:20, and they are connected each-other by a line so to simplify and make the visualization more readable by human eye. There are other ways to visualize the same price changes over a period, and the most commonly used is the candlestick chart, where every candle is a representation of all tick data over a specific frame of time. Let's say …
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olya2517 avatar
olya2517 5 Nov.


TInna avatar
TInna 9 Nov.

wery well!

BhimSha56166409 avatar


adiray avatar
adiray 16 Dec.

great article there

Starsailor avatar
Starsailor 31 Dec.

nice work

orto leave comments
My experience in trading started long time ago and I can already count something about 7 years on charts and I feel like my learning process is just at the beginning. It is not about the ability to recognize a price direction, or to correlate price setup with current fundamental scenario: it is about the mental attitude, the psychological ability to accept and behave properly depending on the changing conditions.
When thinking about my experiences in trading, I can divide my learning process in 2 clear steps: one about learning all the technical part, and one knowing how to behave. The first part took me some years in reading, listening, doing researches, comparing, analyzing and recognizing the different technical developments while happening in a chart. The second part started at a certain point in the meantime, when I had already learnt a lot of things, but still was able only to burn a one thousands dollars account in a very, very quick time.
As per our nature, when things go wrong we tend to blame something or someone. My first reaction was to blame market, being always ready to get my stops no matter where I put them. If I moved stop at breakeven, price…
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GammaBurst avatar
GammaBurst 19 Oct.

Big good work my friend!

TInna avatar
TInna 19 Oct.

well done!)

klintons avatar
klintons 20 Oct.

Very well

rupesh1984 avatar
rupesh1984 25 Oct.

Quite a topic opened here, the one above all other aspects, very top of the ladder. Nicely explained friend, true words!

Bidza avatar
Bidza 27 Oct.

Well done, you have brought OneGoodTrade out into the article writing too...great work.

orto leave comments
What is a fools game? - Trying to Catch A Falling Knife. Knife cuts people and that is where this phrase came about in Forex trading. It is the act of trying to predict where the price of a currency pair will stop falling. Understandably, every trader wants to feel like a superior trader that can predict or think ahead of the market by anticipating price direction and of course catch market bottom or top. However, good and brilliant that may sound and most importantly the feeling of being ahead of others with trade profits for catching market price top/bottom, yet experience has shown that there are very few forex trading situations where prices fall and immediately reverse. Rather, prices fall further and faster than anyone could predict.
I am compelled to write on this subject because the preceding week between Monday the 31st of August 2015 to Friday the 4th of September 2014, we witnessed loses felt in the market even by experienced traders on the Traders Contest. Thorough assessment shows that many fell victim trying to catch a falling knife situation.
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WallStreet6 avatar

Very interesting article! Every trader's dilema whether the trend is over or not. How many times I tried to catch a turnaround in short term consolidation. And another concern after a solid movement should I enter the market and ride the trend or is it too late already. Important aspects- Great Job!

KATRIN_90 avatar
KATRIN_90 16 Sep.

nice job:)

DEMO2TZeHs avatar
DEMO2TZeHs 16 Sep.

great article

Airmike avatar
Airmike 21 Sep.

nice article

Koryphaeen avatar
Koryphaeen 24 Sep.

I really liked your idea, it is very characteristic to newbies and greenhorns to trading. That is why newbies are required to do trading on a demo account first, to self check these kind of account bursting methods and throw them away before putting hands on real accounts. ;) 

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