Why does the market move?

In order for a trade to happen, there has to be both a buyer and a seller. When the market moves up, doesn’t that mean there are more buyers than sellers? (Edit: Or there are bigger orders being bought.) So in that case many orders don’t fill until the number of sellers match the buyers and the market moves back down to where it was. Isn’t it so? I’m confused as to how this works.

This is correct.

No; it isn’t so.

Price movements are caused by imbalances between buying pressure and selling pressure, not by imbalances between numbers of buyers and numbers of sellers (nor by imbalances between “supply” and “demand” to which many people mistakenly attribute it). The difference between these concepts - and realities - is subtle but hugely significant.

The exact mechanism is explained here, with an analogy: [B]301 Moved Permanently.

I [I][U]think[/U][/I] that post answers your question and explains what you want to know. :slight_smile:

you should add that your talking exclusevily about forex in your post. to commodities and stocks your explanation is unfitting.

Ohhh right. Duh. So the price moves to accommodate the pressure from whichever side, and so a balance is met that way, where both buyers and sellers get a “fair” price I suppose. I.e. the pressure alters the price which alters buying and selling patterns. I think I got it.

I allow the context to define that, Turbo: BabyPips is a forex-trading forum.

Your observation above, though entirely correct, probably applies to most of the posts in this forum.

(Actually, the “bricks” analogy I’ve used to explain the concept, in the post to which I linked, is arguably even [I]more[/I] appropriate to stocks than it is to forex - but this doesn’t matter, either.)

dont assume. make clear.

new people come with 0 knowledge. it defines their sucess in trading what they learn in the first 6 months of their beginning more then what they learn in the 2 years after the first 6 months.

yes a forex forum i completely agree. but theres 90 times more knowledge found in books and internet that reffers to stocks and commodities than to forex trading. and a lot of tactics and practices that are based on commodities and currencies dont work very well on forex.

Ok, Chief … shall I ask the Administrators to make me a special little signature-file that says “The above post refers to forex, because this is a forex-trading forum”, so that it can automatically be displayed in every post I ever make here, or do you think perhaps the context predicates that it goes more or less without saying? :7:

dont get angry.

you dont see the problem of having dofferent markets that get moved by different theories and having brokers that allow everyone to trade forex commodities and stocks on the same platform in the sane time and on the other side new people who have 0 background and idea of this business (getting promised quick and easy ritches by bucket brpkers tv advertisements) and the information overload every new person is experiencing? some important things must be stressed out very often and very strongly especially to new traders.

actually, ok youre right. why do i even care who learns or doesnt learn what or who is on the path to sucess and who isnt. not my cup of tea :slight_smile:

As easy as supply demand. Ask price is the cheapest price where someone is ready to sell a currency and bid price is the biggest price offered to purchase the currency. It is like an equilibrium, when a buyer is ready to pay a higher price triggers the lowest price of a seller willing to sell and the market moves up. It’s quite easy in fact.