I just noticed that the market is moving according to the laws of supply and demand again. Oil prices surged after the Hormuz Strait closed. Stock prices fluctuated based on news reports. Crypto prices changed according to the inflow and outflow of liquidity. Some might think it's just random volatility, but actually, there is logic behind it.

Let's think about what the law of demand is. Simply put, it relates to prices rising when everyone wants to buy, and falling when everyone wants to sell. Nothing more complicated than that. But truly understanding this can change the way we view the market.

When prices fall, buyers start to become interested because it looks cheap. Meanwhile, sellers are reluctant to sell because the price is too low. As a result, demand increases, supply decreases, and prices turn back up. Conversely, when prices rise too much, buyers become hesitant and slow down their purchases. Sellers see a good opportunity and start offering their assets. This causes demand to decrease, supply to increase, and prices to adjust downward.

What concerns investors is the equilibrium point. In economics, this is called the Equilibrium. It’s the point where supply and demand meet. The price and trading volume at this point tend to stabilize because no force is strong enough to move it.

But in real markets, this equilibrium isn’t static. It changes based on various factors such as news reports, economic policies, investor confidence, or even geopolitical events. When these factors change, the law of demand causes prices to adjust toward a new equilibrium point.

Applying this concept to stock trading is quite effective. For example, if a company reports better earnings, investors will want to buy more, and the price will go up. Conversely, if there’s bad news, sellers increase, and the price drops.

Traders who use technical analysis often look for points where supply or demand is imbalanced. They analyze candlestick patterns, support and resistance levels, trying to predict where the price will go next. All of this comes down to understanding where buying and selling pressures are.

The popular Demand Supply Zone technique is based on this idea. Traders look for areas where the price has previously decided to buy or sell (Demand Zone or Supply Zone) and wait for the price to return to that area. When the price enters these zones, they anticipate that buying (in Demand Zones) or selling (in Supply Zones) will come in to create a change.

There are two main patterns traders use. The first is catching reversals, such as when the price drops sharply and forms a base in the Demand Zone before turning upward. The second is trend-following, where traders buy on small pullbacks and continue in the same direction.

The most important thing is to understand that the law of demand isn’t just a theory. It’s a real force that moves the market. Every time we see a price change, think about what’s happening to the balance. Is the price rising because demand is increasing? Or because supply is decreasing? Is the price falling because of other reasons? If we think this way, we can see the market more clearly, and our investment decisions will be better grounded.