Let’s start to learn about what the price is. In general, Price refers to the amount of money or other resources that is required to purchase a good or service. Price can be influenced by a variety of factors, including supply and demand, production costs, competition, and economic conditions. In a market economy, prices are typically determined by the forces of supply and demand, with prices rising when demand exceeds supply and falling when supply exceeds demand.
Why The Price Moves?
The reason for the price movement of a stock or assets is, In the marketplace, each trade is a deal between buyers and sellers who meet personally, over the phone, or online, with or without brokers. A buyer always wants to purchase at the lowest possible cost. A Seller wants to sell at the highest cost as could really be expected. Both are put under pressure by the crowd of undecided traders who are ready to jump in and take their deal away.
When the greediest buyer steps up and bids an amount more out of fear that the price will run away from him, a trade occurs. Or, the most anxious seller agrees to accept an amount less out of fear of losing the price. The market crowd’s behavior is reflected in all trades. Each price that appears on the screen represents a brief agreement among market participants regarding its value.
If the price is expected to increase, there is a natural phenomenon of increasing the sense of greed in the participants. If there is an expectation of a decrease in the price, human emotions of panic are triggered. Therefore in both cases, buyers and sellers jump into the trade because of fear of losing the opportunity. Traders must learn to believe in what the market is telling them based on price.
