Just realized that many people are still confused about the fundamental concept of Supply-Demand, which is key to price movements in markets ranging from stocks, commodities, to digital assets.

This topic seems complex, but in reality, it’s very simple. Think of it this way — demand is the desire to buy, while supply is the desire to sell. When these two sides meet, a price is formed.

The important thing is that the laws of supply and demand tell us that when prices go up, people tend to want to buy less, but sellers want to sell more. Conversely, when prices go down, people want to buy more, but sellers are less willing to sell. This creates an equilibrium point.

A clear example is the Hormuz Strait incident last March, when oil transportation stopped. Supply suddenly decreased, while demand remained the same. The result was a rapid spike in prices. This is a clear Supply Shock.

In financial markets, this is even more complex because demand is driven by earnings expectations, investor confidence, and system liquidity. Supply is influenced by capital increases, share buybacks, and IPOs of new companies.

If you look at candlestick charts, green candles (closing higher than opening) indicate strong buying pressure, while red candles (closing lower than opening) indicate dominant selling pressure. Doji candles (opening and closing near the same level) suggest a balance between buyers and sellers.

If you understand the laws of supply and demand deeply, you will be able to read the market better — whether it’s support and resistance levels, which are often points where investors wait to buy or sell, or price trends that indicate whether demand or supply is stronger.

The popular Demand Supply Zone technique involves identifying points where the price moves strongly (Drop or Rally) and then enters a consolidation phase (Base) before breaking out again. For example, DBR (Drop Base Rally) — price drops, consolidates, then rises again; or RBD (Rally Base Drop) — price rises, consolidates, then falls again.

However, the key is that you must understand that the laws of supply and demand are not something you can learn and apply immediately. It requires testing and observing real market prices to get a clear picture. Good analysis comes from experience and continuous study, not just theory.