The Only Two Things that Move Stock Prices

Despite what people may otherwise tell you or any preconceived ideas you may have, there are only two things that move stock prices. They are supply and demand – nothing more and nothing less. This is the foundation of basic economics as shown in the graph below. Since quantity remains the same, price is what fluctuates as a results of supply and demand.

If there is more demand than supply for a stock, then the price shall rise. Conversely, if there is more supply than demand for something, then the price shall fall. This is absolutely true in any market.

The next question is what affects the supply and demand for a particular security or traded instrument. Is it the profits in the financial statements? The upcoming expansion plans? The new product? Is it dividend payments? No one can be absolutely sure at any point why people may be buying and selling shares. That’s where technical analysis comes into play.

The Only Two Things that Move Stock Prices

The Only Two Things that Move Stock Prices

The next big revelation is that the bulk of supply and demand does not come from retail traders or retail investors. They come from the big boys (BB) and smart money (SM) like traders and fund managers in banks, funds and other institutions. They are the ones who move the market. Learning to interpret price action and volume is our window to tap into their psyche and profit from their actions.

Cheers
Spencer
https://www.facebook.com/iamrecneps
https://www.instagram.com/iamrecneps

Free Download: Trading Foundation Workshop

Get instant access to this exclusive 2-hour online video tutorial series:
If you are new to trading or are struggling to get consistent results, this workshop will show you how any trader can make consistent & stress-free monthly profits on any market (stocks, forex, Bitcoin, etc), with just 15 minutes a day.

Spencer Li is a trader, investor & entrepreneur who achieved financial freedom at 27 (2013), having to date accumulated a diversified portfolio of properties, stocks, REITs, and 10+ businesses across different industries. As a professional trader, he has over 10 years of market experience, and has been featured on more than 20 occasions in the media.

Join our new FREE facebook discussion group!

Join our community of 6,000+ traders in this fast-growing facebook group on forex and cryptocurrencies. Receive free education and signals, and take the chance to ask us any questions!

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply