Educational Thread :
#trading
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Section 1 — Supply and Demand
Basic Trading Principles
Demand = Buyers
Buyers = Support
Supply = Sellers
Sellers = Resistance
Support will be the level at which demand will outweigh supply, causing the price to rise/increase.
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Resistance will be the level at which supply will outweigh demand, causing the price to fall/decrease.
Supply and demand zones in trading are usually liquidity pools.
When an asset illustrates a sharp rise or decline large institutional players (whales in the case of crypto)
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sometimes miss the entry or exit because of the size of the orders. When this happens they leave pending orders to buy or sell at the base of the liquidity zones, with the expectation that the price will return there to fill the remaining orders.
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A high price rise zone is the demand zone (support) and the zone where price has made a sharp decline is the supply zone (resistance).
Demand Zone (Buyers Present)
Technical Analysis Term = Support