Actually, if you ask what drives the prices of all assets—from stocks, gold, and oil to digital coins—the answer is demand and supply.

In March, when the Strait of Hormuz was closed due to political developments, about 20% of the world’s crude oil that flows through this point suddenly disappeared from the market. The result was a rapid surge in oil prices. Why? Because supply suddenly fell, but energy demand (demand and supply from the buyers’ side) remained the same. That gap is what creates price pressure.

In simple terms, demand and supply is a two-sided game—buyers versus sellers. The stronger side determines which way the price tilts. When there are many buyers, prices rise. When there are many sellers, prices fall.

Now, if we talk about stocks specifically, stocks are also a commodity. There are people who want to buy and people who want to sell. The intensity of these two forces is what determines where the price will go. If a company releases good earnings results, investors rush to buy, demand surges, and the price goes up. Conversely, if the news is bad, everyone wants to sell, supply increases, and the price goes down.

In trading, there is a tool called the Demand Supply Zone that is used to read price trends. When prices move up rapidly, it reflects strong demand. When prices drop sharply, it indicates strong supply. At the point where the price pauses and fluctuates within a range—that’s where both sides are balanced.

Traders take advantage of this. When the price breaks out of the range upward, they buy. When it breaks down out of the range, they sell—allowing them to time their moves more effectively.

Most importantly, if you understand demand and supply well, you’ll see that prices don’t move randomly or without reason. There is logic, and there is momentum behind it. Once you know what those forces are, price forecasting becomes much easier.