I just noticed the topic I need to discuss. Amidst the chaos of the market and various events happening around the world, the principles of supply and demand remain the most fundamental drivers of price movements, whether in stocks, energy, gold, or even digital assets.

Let's try to understand what supply and demand really are. The simplest way is to think of them as the desire to buy and the desire to sell, respectively, when we look at each one separately.

Starting with demand, which is the desire to purchase goods at different price levels. The law of demand tells us that if the price increases, the desire to buy decreases. Conversely, if the price drops, the desire to buy increases. It's simple and understandable. But why is this the case? There are two reasons: income effect, where a price decrease increases the real value of our wallets, allowing us to buy more; and substitution effect, where a lower price makes this good look cheaper compared to similar goods.

As for supply, it is merely a reflection of demand because the willingness to sell goods correlates with price. When prices go up, there is more selling pressure; when prices go down, selling decreases.

This is important because the actual market price does not arise solely from supply or demand but from the equilibrium point, where the demand and supply curves intersect. At this point, price and quantity are in balance. If the price rises above this point, excess inventory occurs, prompting sellers to lower prices. If the price drops below, shortages occur, and buyers are willing to pay higher prices.

A recent clear example is the Hormuz Strait situation in March, when oil shipping routes were closed. Over 20 percent of oil supply suddenly disappeared from the market. Meanwhile, demand remained, resulting in a rapid price surge. This is the best example of how supply and demand drive prices.

In financial markets, stock price movements are similar. When good news comes out, buyers increase their purchasing volume, and sellers hold back, causing prices to rise. Conversely, bad news causes buyers to delay buying and sellers to increase selling, leading to price declines.

Traders therefore apply the principles of supply and demand to time their buy and sell decisions, looking for points where prices are out of balance. They wait for prices to retrace within a range, and when new factors come in, prices break out of that range and move toward a new equilibrium.

A popular technique used is called the Demand Supply Zone, which analyzes price trends to find entry points, whether for reversal signals or continuation in the trend.

In simple summary, if we understand supply and demand, we can understand where prices are headed. Whether for fundamental analysis or technical trading, it all depends on how we practice and observe the market.