Stock market supply and demand with examples

Understanding supply and demand in market

In stock market, orthodox economic supply demand does not work, that why many traders lose money due to silly conclusions based on old model.

In economics, supply and demand example is demand decreases and prices rise while demand will pick up as prices falls to low. But In practical trading, stocks, futures, commodity or currency futures follows auction based model.

 

In auction practical example is when demand for the item rises as prices soars. And if no one interested in item that goes in box without bid. That why in auctions, buyer’s does not care for items intrinsic value. This can be easily visible on intraday chart of stocks because in single day nothing much changes at company fundamental level but on news flow and on market reactions we might see wild swing in company share prices towards both ends.

 

Understanding and practicing market’s auction based model is one of the key point for predicting market movement and become winner in trading.

The Author

Pramod Baviskar

Professional Market Trader And Owner Of Dalal Street Winners Advisory And Coaching Services. Working Since 2007 And Online Presence Since 2010. We Provide Highly Accurate And Professional 1 Entry And 1 Exit Future, Option, Commodity, Currency And Intraday Stock Tips On Whatsapp With Live Support And Follow Up.
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