I just noticed something very interesting about price movements in the market. Since the closing of the Hormuz Strait in March, I can clearly see that the principles of supply and demand still remain the true driving forces behind the prices of all assets, whether stocks, oil, gold, or even digital assets.

In fact, supply refers to the willingness to sell goods or services at various price levels, while demand is the willingness to buy. These two work together to determine the market equilibrium price. I think many people may not deeply understand how these two forces impact our investments.

Let's talk about demand first. When prices drop, people tend to want to buy more. Conversely, if prices rise, the demand decreases. This is called the Income Effect and the Substitution Effect, which cause price and quantity to have an inverse relationship.

As for supply, it refers to the quantity that sellers are willing to put on the market at each price level. Opposite to demand, when prices go up, sellers want to sell more because they can make higher profits. Factors affecting overall supply include production costs, technology, and future price expectations.

What I find interesting is that in March, the closure of the Strait of Hormuz caused about 20% of the world's crude oil supply passing through that point to disappear from the market instantly. This is what is called a Supply Shock. Meanwhile, energy demand remained steady, resulting in a rapid surge in oil prices.

Now, I see many investors increasingly applying this principle, especially in candlestick analysis. If a candlestick is green, it indicates buying pressure wins; if red, selling pressure dominates. Doji candles signal that both sides have equal strength.

Using Demand and Supply Zones is a popular technique for timing trades. Traders often look for points where the price begins to lose balance and a new equilibrium forms. When there’s a sharp rally or plunge, a large candlestick appears and the price enters a consolidation zone. At this point, supply refers to the level where sellers are waiting to offer, while demand is where buyers are waiting.

There are two main patterns I see often: DBR (Demand Zone Drop Base Rally), which occurs after a sharp decline followed by a reversal upward, and RBD (Supply Zone Rally Base Drop), which occurs after a rally followed by a reversal downward. Traders can enter trades at the breakout of these consolidation ranges.

In fundamental analysis, supply refers to the number of shares available in the market, which can increase through capital increases or decrease via share buybacks. Company policies and new listings directly influence this.

I believe the most important thing is to understand that stock prices are driven by buying and selling forces. If buying wins, prices go up; if selling wins, prices go down. Earnings forecasts and growth expectations influence demand, while company decisions affect supply.

Price trends are also good indicators. If prices keep making new highs, it shows demand is strong. If prices keep making new lows, supply is exerting pressure. Identifying support and resistance levels helps us see where buying and selling forces are concentrated.

Ultimately, I believe learning these principles requires applying them to real asset prices in the market. Observing what supply and demand mean in different real-world situations will deepen our understanding. Once we see the bigger picture clearly, our price predictions will become more accurate.