I just noticed that supply and demand are quite important in investing, but many people often don’t pay much attention to them. In fact, they are the most fundamental basis of price movement—whether it’s stocks, energy, gold, or even digital assets.

Let’s talk about supply and demand. The word “Demand” (อุปสงค์) means the desire to buy, and “Supply” (อุปทาน) means the desire to sell. When we plot this on a chart, we get the demand curve and the supply curve—each point on the lines shows how much trading happens at a given price.

The law of demand is very simple: when the price goes up, people want to buy less; when the price goes down, people want to buy more. Why does this happen? It comes from two things: the income effect (when prices fall, our money can go further) and the substitution effect (when prices fall, this product looks cheaper than other options, so people want to buy more).

As for supply, it’s the opposite of demand. When the price goes up, sellers want to sell more; when the price is lower, sellers don’t want to sell. This makes sense—who would want to sell their goods for cheap, right?

What really matters is the equilibrium point—the point where the demand curve and the supply curve intersect. This is the point where price will stay stable. Because if the price is higher than this, sellers will sell more but buyers will buy less, causing the price to drop. Conversely, if the price is lower than this, buyers will want to buy more but sellers will sell less, causing the price to rise.

Now, what I’ve noticed is that in financial markets, supply and demand are influenced by many factors, such as macroeconomics, interest rates, liquidity in the system, investor sentiment, company policies, and even various news and information.

A great real-world example is oil. In March this year, when the Strait of Hormuz was closed, about 20% of the world’s oil disappeared from the market. This is called a “Supply Shock”—supply falls suddenly, while demand (อุปสงค์) remains the same. The result is a sharp spike in oil prices.

When it comes to stock investing, if we understand supply and demand, we can understand why stock prices move. Stock prices rise = more people want to buy (strong demand). Stock prices fall = more people want to sell (strong supply). This is often driven by expectations of earnings, news information, or economic conditions.

From a technical analysis perspective, we can look at candlesticks’ Support and Resistance levels to gauge buying and selling pressure. Green candles = buying pressure wins; red candles = selling pressure wins. Meanwhile, a Doji = both sides have equal strength.

There’s a technique called the Demand Supply Zone that many traders use. It involves looking for points where the price loses balance and finding entry points. For example, if the price drops sharply (Drop), then consolidates in a range (Base), and then rallies (Rally), this is called DBR (Demand Zone Drop Base Rally)—a signal that traders can enter from. On the other hand, if the price rises sharply, consolidates, and then falls back down, that’s called RBD (Supply Zone Rally Base Drop).

What I see is that understanding supply and demand isn’t as difficult as you might think. You just need to practice by looking at real price charts frequently, and the picture will become clearer. This knowledge applies to both fundamental analysis and technical analysis.

In summary, supply and demand are extremely important tools for investors. Whether you’re trading stocks, consumer goods, or other assets, as long as you can predict supply and demand, you’ll be better at predicting prices and market movements. Try studying and applying it in your investing.