PRICE
In this article we gonna learn about PRICE and try to understand what it is? Why does it move? How does it move?
Table of Contents
What is PRICE ?
Regardless of whether we are talking stocks, futures, foreign exchange, or any other product at all, price is the amount a buyer pays to acquire a product from a seller.
Any one transaction involves a product, and two parties – the buyer and the seller.
- The seller holds the product.
- The buyer wants to purchase it.
Price is the amount that they agree upon for the transfer of the product from the seller to the buyer.
The key word in this sentence is… “agree”.
The buyer wants to buy at this price.
The seller wants to sell at this same price.
They come together.
There’s a transaction.
So, what is price?
Yes, it is the amount, or points value, that they agree to transact.
From a trading perspective…
PRICE is two traders making a buy and sell decision.
Now, markets don’t transact all at one price… they move.
Thankfully, otherwise there wouldn’t be profit opportunity.
How does Price Move?
Price movement is a function of supply and demand.
In simple (non-textbook) language.
- Supply is the amount of a product which sellers want to sell at a particular price.
- Demand is the amount of a product which buyers want to buy at a particular price.
PRICE will move with changes in supply and/or demand.
In next article will take a look at how price moves through the changes in Supply and Demand with an example of 2nd Hand Mobile Auction.
Video
The above video explains this article in hindi language.