I've just noticed that many people still don't understand how supply and demand actually work in the real market, even though they are the foundation of all price movements, whether it's stocks, oil, gold, or even digital assets.

Let's think simply: demand is the desire to buy, while supply is the desire to sell. When more people want to buy but there isn't enough product, the price goes up. Conversely, if there are many sellers but no one wants to buy, the price must go down. It's that simple.

The rule of demand that many people know is: high price → decreased desire to buy, and low price → increased desire to buy. Because when the price changes, two things happen: income effect (when prices fall, we have more money left in our pockets, so we can buy more) and substitution effect (when this product becomes cheaper, people stop buying other things and buy this instead).

Supply is similar but in the opposite direction: high price → sellers want to sell more because they make more profit, low price → sellers want to sell less because profit is low. Factors affecting supply include production costs, technology, tax policies, and even natural disasters.

A clear example is last year, when the Strait of Hormuz was closed due to political tensions, about 20% of the world's crude oil passing through that strait disappeared from the market. Meanwhile, energy demand remained the same. The result was a rapid decrease in supply, causing oil prices to keep rising because of shortages. This is a supply shock that caused a sharp reversal in prices.

But just supply or demand alone doesn't determine the price. The true price is set at the equilibrium point, where the demand and supply curves intersect. At that point, the quantity and price tend to stabilize because if prices go up, sellers will sell more but buyers will buy less, leading to excess supply. If prices go down, buyers will buy more but sellers will sell less, leading to shortages. Prices then adjust accordingly.

In financial markets, supply and demand still drive prices but with more complexity. Macroeconomic factors like interest rates, economic growth, and liquidity all influence demand. Corporate policies, new listings, and regulations also impact supply.

When it comes to stocks, rising stock prices indicate buying pressure wins, while falling prices show selling pressure dominates. In fundamental analysis, we look at company performance and forecasts. Good news increases demand; bad news increases supply.

In technical analysis, we use tools like candlestick charts. Green candles (close higher than open) show strong demand; red candles (close lower than open) show strong supply. Doji candles (close near open) indicate balance between buyers and sellers, with no clear winner.

Trend analysis also helps. If prices keep making new highs, demand remains strong. If prices keep making new lows, supply remains strong. Support levels are points where buyers are waiting to buy, and resistance levels are points where sellers are waiting to sell.

The Demand Supply Zone technique is widely used by traders to find entry points by identifying areas where price has become unbalanced sharply (rising or falling rapidly) and then consolidates. When the price breaks out of that zone, it signals that buying or selling momentum has returned strongly.

The DBR (Drop Base Rally) pattern occurs when prices fall quickly, then consolidate to form a base, and when buying resumes, prices rise again. Conversely, RBD (Rally Base Drop) is the opposite: prices rise, consolidate, then fall sharply. Trend-following trading is similar: RBR (Rally Base Rally) means prices rise, consolidate, then continue rising; DBD (Drop Base Drop) means prices fall, consolidate, then continue falling.

In summary, if we understand how supply and demand work, we can better predict prices—whether trading stocks, commodities, or other assets. But the key is to test these concepts in real market conditions to see the actual price movements clearly.