How to Determine Areas of Supply and Demand

Supply and demand is a basic law that moves the market. Supply which means supply and demand which is demand will occur when goods are sold or goods are purchased.

This also applies in the forex market, which is a meeting place for forex sellers and buyers. Supply and demand may not be a big thing when talking about professional traders, but how about supply and demand for beginner traders who are new to the trading world?

Basic Concepts of Trading Supply and Demand

Before entering into the supply and demand relationship in beginner traders, we must know the basic concepts first. Supply is the amount of goods available at one time in the market, while demand is the amount of goods desired at one time. For example, an item has an increase in its supply, while the quantity demanded remains stable. So what happened from the merchant's side was a cycle of money exchange and renewal of goods which could be indicated that the trader had suffered a loss because the goods did not sell.

In order not to experience growing losses, traders will lower prices so that buyer interest can rise again. Conversely, the lack of availability of goods and high demand will increase the value of these goods. In short, the concepts that can be deduced from the relationship above are: If demand increases and supply does not change, then there will be a shortage of goods so that the price of goods will rise. When demand decreases and supply does not change, the accumulation of goods will occur and prices will fall. If demand remains and supply increases then the accumulation of goods will occur and prices will fall. When demand remains and supply decreases, there will be a shortage of goods and prices will rise.

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