Supply and Demand Meaning : The supply and demand quantity of commodity producers sells at some price and the quantity that consumers wish to buy. This blog explains demand and supply trading strategy in details. Here the price is referred to as an equilibrium price which represents the agreement between producer and consumer of goods. In equilibrium, the number of goods is supplied by the producer is equals the quantity demanded by consumers.
Demand Curve :The factors accept the price of a commodity that is held constant as analysis. They will involve examining the relationship between some levels of prices. The price-quantity is then plotted on a curve which represented as the price on the vertical axis and quantity on the horizontal axis. The demand curve goes in downward-sloping that reflects the willingness of consumers to purchase commodities at low price levels.
Supply Curve :The quantity of a commodity is supply depends on the price. In technical analysis of supply, there is the relationship between prices and quantity offered by producers at each price with constant. These are the heart of any trade and true of the share market. The push and pull between the two will reflect the price of a security as availability, and desire to own security. The technical analysis is used to examine the movement of prices. One of the important aspects of analysis is by determining supply and demand zones.
So to identify the supply zone the price is higher than the bid price in the demand zone they are low. The bid price itself is a trader willing to pay for the stock. At trading, the supply and the demand zone will identify the pattern. The next aspect is to get a grasp on the rally/drop pattern when it is indicative of a rally you sell it at high/ low. The trading range is the term used to denote the condition in the market that is stable. While trading the range selling high low is based on S&R levels. Trading the breakout is called supply and demand trading and changes as expected. Here the price shifts outside the S&R level as supply and demand zone.
The day traders need to watch for breakout formation of rectangular range when marketing open/close when liquidity is relative. The trading these area are lucrative if approached correctly. So you should implement some methods in your trading plan that results in improvement. Trading is the best business that allows participants to get freedom of expression and try out new methods. So by using these areas as a core factor in a strategy traders use some concepts to confirm the validity of the area.
view moreThese zones are the areas that show liquidity at a specific price. The supply zone is called the distribution zone and the demand zone is called the accumulation zone. The demand and supply is the opposite of support and resistance
The support and resistance level are very popular as these zone drives the markets. The trader identifies these zone to find where high impact price areas exist. This happens in advance before the average retail trader understands what is happening.
These area is boasting healthy momentum by engulfing nearby highs/lows that are desirable. It is important points on the chart that shows the price that is able to move with opposition. The healthy momentum should be a requirement as it informs traders of the area housed with strong intent and attention.
Supply and demand trading is a strategy to understand the zone in which you can enter into trade. The support and resistance are defined by key levels of price. The supply and demand are well defined by wide price area or zone. The breadth is an easy way to find the entry for trade.
© 2020 All rights reserved My blogs (Posts) and videos is only educational purpose on stock market and depend on my self research and analysis. I can't advice to buy/sell any stock. because I'm not SEBI registered.If someone wants to inter the stock market, then my advice is first learn from an authorize institution or take advice from your authorized adviser.
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